Unlawful Foreclosures, a Compensation Fund for Victims and a Worsening (if possible) Perception of the Big Banks

Unlawful Foreclosures, a Compensation Fund for Victims and a Worsening (if possible) Perception of the Big Banks

Sounds about right...
Bank executives from across the country have been flooding Capitol Hill to defend themselves against multiple forclosure-related investigations. A congressional watchdog group released a report Tuesday that said this debacle could threaten the banks with billions of dollars of losses and further prolong the housing depression.
From the suit, the reason is based on what they call:
"an undisciplined rush to seize homes" through "pervasive and willful disregard of knowledge, facts and statutes."
The additional class actions, which could be expanded nationally, seek damages for homeowners whose properties were foreclosed upon using fraudulent documents. The biggest threat seems to be from the lawsuits that contend the banks' foreclosure machinery amounted to a racketeering enterprise. One such case filed in Indiana was filed under civil Racketeering Influenced and Corrupt Organizations (RICO) laws, which allows damages to be tripled.
This would be disasterous for the banking industry, and for those hoping for the housing market to receive a boost, if similar such suits are filed across the country. The PR firms and crisis management specialists are doing their best work around-the-clock, to try and keep this from spreading and worsening public perception of their banks.
BOA shares are down over 20% since the first of the year, and that was prior to this scandal.
Even if there is a settlement reached with all the state attorneys general, the class action suits would not be stopped, but it could limit their damage.
Much of the discussion with the state prosecutors is about a compensation fund that would be modeled after the one created for the victims of the BP oil spill. The banks clearly see the writing on the wall.
The plantiffs also cite:
the fact that the bank and its affiliates, by imposing a moratorium on foreclosures from Oct. 8 to Oct. 18 while reviewing their procedures, "have admitted that in all of their foreclosure cases, they, as a moving party, prosecute their claims with a complete disregard of whether or not they have met their burden."
Both sides say that they are not close to a deal, though I think we all know that a deal will be reached.
One of the topics being discussed, that clearly needs reform, is bringing an end to what is referred to as a "dual-track" process. This was insisted upon by those behind the investments of mortgage-backed securities and under this process, those who were/are put in loan modification programs are put into foreclosure proceedings at the same time. I feel dirty even typing that.
Anyone reading this blog that feels they were foreclosed upon unfairly/illegally? Let me hear your thoughts�
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