Homeowners with Fannie Mae loans who struggle to pay their mortgage and want to avoid foreclosure (and other legal actions like a deficiency judgment) may qualify for a new program called Mortgage Release.
Mortgage Release allows delinquent homeowners to voluntarily transfer their home (the title and all property associated with it) to their mortgage company in exchange for being “released” from their monthly mortgage payments. Mortgage Release may even provide a cash incentive of up to $3,000 to eligible homeowners to help with moving expenses.
The program features three exit options:
Leave the home immediately
Stay in the home for up to three months (without paying rent)
Stay in the home for up 12 months (paying market-rate rent)
Why It Matters
Mortgage Release meets the needs of people who may need more time to plan their move, especially if they are transitioning jobs or have children in school. “This is a simple and flexible alternative to foreclosure that puts homeowners in control of when they leave their home,” explains Bill Cleary, Fannie Mae’s vice president of Credit Portfolio Strategies. “Homeowners can vacate the home immediately, stay up to three months to plan their transition, or pay market-based rent and stay for up to a year. Having options with their exit choices can make their transition much easier all-around,” says Cleary.
In addition gaining control, homeowners who qualify for a Mortgage Release can become eligible for a Fannie Mae loan in as little as 2 years versus having to wait up to 7 years if they’d gone through foreclosure. Additionally, legal actions (like a deficiency judgment) are waived.
“This means you can start repairing your credit much sooner,” notes Cleary.
Finally, because Mortgage Release is not a foreclosure, the homeowner’s name doesn’t appear in the newspaper (such as happens during a foreclosure), providing more privacy.
Get Help Now
If you’re behind in your mortgage payments and your loan is owned by Fannie Mae, ask your mortgage company (the company listed on your monthly mortgage statement) about Mortgage Release or contact a Fannie Mae Mortgage Help Center.
Saturday, July 29, 2017
Wednesday, March 15, 2017
Mortgage Service Firm OKs $225 Million California Settlement
By DON THOMPSON, Associated Press
SACRAMENTO, Calif. (AP) — A mortgage services company signed a $225 million settlement with California regulators on Friday to settle allegations it overcharged active-duty military members, was late in providing key information for some civilian borrowers seeking to modify their loans and violated other laws.
Florida-based Ocwen Loan Servicing agreed to pay $20 million to reimburse borrowers and make $198 million in loan modifications over three years that will lower costs for thousands of California borrowers.
The settlement with the California Department of Business Oversight covers January 2012 through mid-2015, when Ocwen says it serviced more than 531,000 California loans. Under the terms, Ocwen may begin handling new California mortgages.
The settlement "will hold Ocwen accountable for widespread violations of laws that harmed borrowers in our state," department Commissioner Jan Lynn Owen said in a statement.
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Telephone and email messages left with Ocwen seeking comment were not immediately returned.
Wilbur Ross, President Donald Trump's choice to head the U.S. Commerce Department, served on the board of Ocwen's parent company, Ocwen Financial Corp., in 2013-14.
The billionaire investor sold subprime mortgage specialist Homeward Residential to Ocwen in 2012 amid investigations into his company's business practices.
Ocwen previously settled a lawsuit with the U.S. Consumer Financial Protection Bureau and attorneys general in 49 states, including California, over alleged misconduct by Ocwen and by Homeward during the time it was under Ross's control. The Senate is expected to vote on his nomination during the week of Feb. 27.
Ocwen previously paid about $2 million to more than 3,100 California borrowers because of what California regulators said was a practice of sending time-sensitive letters to borrowers after the date on the letter.
The tardy letters sometimes made it difficult for the borrowers to modify their loans, said regulators, who also found the company charged active-duty military personal more than the 6 percent rate mandated by federal law.
The settlement requires the company to contact more than 19,000 borrowers and compensate them if they were harmed.
Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
SACRAMENTO, Calif. (AP) — A mortgage services company signed a $225 million settlement with California regulators on Friday to settle allegations it overcharged active-duty military members, was late in providing key information for some civilian borrowers seeking to modify their loans and violated other laws.
Florida-based Ocwen Loan Servicing agreed to pay $20 million to reimburse borrowers and make $198 million in loan modifications over three years that will lower costs for thousands of California borrowers.
The settlement with the California Department of Business Oversight covers January 2012 through mid-2015, when Ocwen says it serviced more than 531,000 California loans. Under the terms, Ocwen may begin handling new California mortgages.
The settlement "will hold Ocwen accountable for widespread violations of laws that harmed borrowers in our state," department Commissioner Jan Lynn Owen said in a statement.
ADVERTISING
Telephone and email messages left with Ocwen seeking comment were not immediately returned.
Wilbur Ross, President Donald Trump's choice to head the U.S. Commerce Department, served on the board of Ocwen's parent company, Ocwen Financial Corp., in 2013-14.
The billionaire investor sold subprime mortgage specialist Homeward Residential to Ocwen in 2012 amid investigations into his company's business practices.
Ocwen previously settled a lawsuit with the U.S. Consumer Financial Protection Bureau and attorneys general in 49 states, including California, over alleged misconduct by Ocwen and by Homeward during the time it was under Ross's control. The Senate is expected to vote on his nomination during the week of Feb. 27.
Ocwen previously paid about $2 million to more than 3,100 California borrowers because of what California regulators said was a practice of sending time-sensitive letters to borrowers after the date on the letter.
The tardy letters sometimes made it difficult for the borrowers to modify their loans, said regulators, who also found the company charged active-duty military personal more than the 6 percent rate mandated by federal law.
The settlement requires the company to contact more than 19,000 borrowers and compensate them if they were harmed.
Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Bride Of Benghazi: GOP Opens New Scandal Circus Over Mortgage Settlements
WASHINGTON — Since taking control of both chambers of Congress in January, Republicans have grappled with newfound pressure to govern. But the House Judiciary Committee on Thursday got back to basics: drumming up conservative outrage with a fresh, flimsy scandal.
During a hearing that lasted roughly two hours, Republicans repeatedly suggested that the Department of Justice was illegally funneling money to “activist groups” using sham transactions embedded in legal settlements with two big banks.
The event was essentially an exercise in dog-whistling to unsavory elements of the GOP base. In his opening statement, Judiciary Committee Chairman Bob Goodlatte (R-Va.) ominously name-checked both the defunct ACORN and the Hispanic civil rights advocacy group La Raza. One expert witness Republicans called to testify is a filmmaker currently collaborating with an anti-Islam conspiracy theory author on a movie that will purportedly show “how the government’s crusade against alleged lending racism” caused the financial crisis.
Rep. Tom Marino (R-Pa.) said he was worried “someone at Justice, and as you said — at the highest levels — is picking and choosing who will get this money.”
“It looks and smells a little bit like a slush fund,” said freshman Rep. David Trott (R-Mich.), who built a personal fortune running a “foreclosure mill” law firm to help banks evict borrowers.
In other words, Republicans think President Barack Obama and Attorney General Eric Holder have concocted a big, covert scam to help minorities.
If Trott is right, the Justice Department is running a pretty lousy slush fund. So far, no money has flowed out the door to any activist groups. And the two banks involved — Citigroup and Bank of America — haven’t even figured out which organizations will get money.
Republicans are raising a ruckus over a provision included in DOJ fraud settlements with both banks over widespread misdeeds in the mortgage securities market in the years leading up to the financial crisis. Under the agreements, banks must contribute a combined $30 million — well under 1 percent of the multi-billion-dollar fine — to mortgage counseling agencies.
How convenient, Goodlatte argued, that DOJ required banks to pay these groups after Congress explicitly cut their funding. He didn’t explain why Congress decided to slash the budget for mortgage counseling amid a foreclosure epidemic.
City University of New York law professor Alan White and DOJ’s Geoffrey Graber both said counseling funds were critical for ensuring any actual consumer mortgage relief went to good use. Banks have inked settlement after settlement with various federal agencies because their mortgage practices have been not only terrible, but terribly confusing. Navigating the system without a qualified mortgage counselor is effectively impossible — and frequently fruitless — even for those with expert guidance. Banks typically will not work with troubled borrowers who are not receiving counseling. If the settlements work, these groups — which are overseen by the Department of Housing and Urban Development — will have a lot more to do.
While Citi and BofA do, in fact, have to pay money to counseling groups, DOJ says it doesn’t actually direct those payments. The department allows banks to select any organization approved by HUD. The list includes thousands of nonprofits, including religious groups.
Paul Larkin of the Heritage Foundation argued that the settlements circumvented the constitutional role of Congress to appropriate funds, saying DOJ had engaged in “sham transactions” by requiring banks to contribute money to counseling groups, instead of to the government itself, which would have been barred from doing so. White said state regulators have inked similar provisions. It is common in fraud settlements for regulators to require wrongdoers to make restitution with consumers.
Republicans have repeatedly handed the Obama administration favors by highlighting a substantive policy problem, then making wild, unfounded accusations of wrongdoing. There are genuine reasons to question the U.S. military action in Libya, for example. But the GOP latched onto Benghazi conspiracy theories alleging a political cover-up to steal the 2012 election that even the Republicans’ own report on the matter has now rejected.
Similarly, the Obama administration’s Wall Street accountability record is remarkably weak. DOJ has declined to prosecute employees of the biggest banks for misdeeds that led to the crisis, and for malfeasance in the years that followed. Obama’s current attorney general nominee, Loretta Lynch, inked a meager settlement with HSBC in 2013 over allegations of laundering drug money, but recent reports suggest the bank was embroiled in massive simultaneous tax evasion maneuvers that U.S. authorities missed. The first major round of mortgage settlements with big banks was poorly designed, and helped a paltry number of borrowers, despite misleadingly large dollar figures.
All of these shortcomings would be legitimate matters for GOP oversight. But instead of targeting Obama administration coziness with big banks, Republicans have locked in on community groups that help minorities.
In November, Goodlatte and House Financial Services Committee Chairman Jeb Hensarling (R-Texas) sent a letter to Holder demanding a trove of communications surrounding the settlements.
“The terms in the Justice Department’s two latest settlements look less like consumer relief and more like a scheme to funnel money to politically favored special interest groups,” reads the letter, which singles out La Raza.
Although DOJ responded to the Goodlatte-Hensarling letter in January, it has not yet turned over internal emails sought by the Republicans.
“You can expect that this will escalate if you do not provide the documentation that we requested two months ago,” Goodlatte told DOJ’s Geoffrey Graber, a deputy associate attorney general, at Thursday’s hearing.
It almost makes you miss Benghazi.
During a hearing that lasted roughly two hours, Republicans repeatedly suggested that the Department of Justice was illegally funneling money to “activist groups” using sham transactions embedded in legal settlements with two big banks.
The event was essentially an exercise in dog-whistling to unsavory elements of the GOP base. In his opening statement, Judiciary Committee Chairman Bob Goodlatte (R-Va.) ominously name-checked both the defunct ACORN and the Hispanic civil rights advocacy group La Raza. One expert witness Republicans called to testify is a filmmaker currently collaborating with an anti-Islam conspiracy theory author on a movie that will purportedly show “how the government’s crusade against alleged lending racism” caused the financial crisis.
Rep. Tom Marino (R-Pa.) said he was worried “someone at Justice, and as you said — at the highest levels — is picking and choosing who will get this money.”
“It looks and smells a little bit like a slush fund,” said freshman Rep. David Trott (R-Mich.), who built a personal fortune running a “foreclosure mill” law firm to help banks evict borrowers.
In other words, Republicans think President Barack Obama and Attorney General Eric Holder have concocted a big, covert scam to help minorities.
If Trott is right, the Justice Department is running a pretty lousy slush fund. So far, no money has flowed out the door to any activist groups. And the two banks involved — Citigroup and Bank of America — haven’t even figured out which organizations will get money.
Republicans are raising a ruckus over a provision included in DOJ fraud settlements with both banks over widespread misdeeds in the mortgage securities market in the years leading up to the financial crisis. Under the agreements, banks must contribute a combined $30 million — well under 1 percent of the multi-billion-dollar fine — to mortgage counseling agencies.
How convenient, Goodlatte argued, that DOJ required banks to pay these groups after Congress explicitly cut their funding. He didn’t explain why Congress decided to slash the budget for mortgage counseling amid a foreclosure epidemic.
City University of New York law professor Alan White and DOJ’s Geoffrey Graber both said counseling funds were critical for ensuring any actual consumer mortgage relief went to good use. Banks have inked settlement after settlement with various federal agencies because their mortgage practices have been not only terrible, but terribly confusing. Navigating the system without a qualified mortgage counselor is effectively impossible — and frequently fruitless — even for those with expert guidance. Banks typically will not work with troubled borrowers who are not receiving counseling. If the settlements work, these groups — which are overseen by the Department of Housing and Urban Development — will have a lot more to do.
While Citi and BofA do, in fact, have to pay money to counseling groups, DOJ says it doesn’t actually direct those payments. The department allows banks to select any organization approved by HUD. The list includes thousands of nonprofits, including religious groups.
Paul Larkin of the Heritage Foundation argued that the settlements circumvented the constitutional role of Congress to appropriate funds, saying DOJ had engaged in “sham transactions” by requiring banks to contribute money to counseling groups, instead of to the government itself, which would have been barred from doing so. White said state regulators have inked similar provisions. It is common in fraud settlements for regulators to require wrongdoers to make restitution with consumers.
Republicans have repeatedly handed the Obama administration favors by highlighting a substantive policy problem, then making wild, unfounded accusations of wrongdoing. There are genuine reasons to question the U.S. military action in Libya, for example. But the GOP latched onto Benghazi conspiracy theories alleging a political cover-up to steal the 2012 election that even the Republicans’ own report on the matter has now rejected.
Similarly, the Obama administration’s Wall Street accountability record is remarkably weak. DOJ has declined to prosecute employees of the biggest banks for misdeeds that led to the crisis, and for malfeasance in the years that followed. Obama’s current attorney general nominee, Loretta Lynch, inked a meager settlement with HSBC in 2013 over allegations of laundering drug money, but recent reports suggest the bank was embroiled in massive simultaneous tax evasion maneuvers that U.S. authorities missed. The first major round of mortgage settlements with big banks was poorly designed, and helped a paltry number of borrowers, despite misleadingly large dollar figures.
All of these shortcomings would be legitimate matters for GOP oversight. But instead of targeting Obama administration coziness with big banks, Republicans have locked in on community groups that help minorities.
In November, Goodlatte and House Financial Services Committee Chairman Jeb Hensarling (R-Texas) sent a letter to Holder demanding a trove of communications surrounding the settlements.
“The terms in the Justice Department’s two latest settlements look less like consumer relief and more like a scheme to funnel money to politically favored special interest groups,” reads the letter, which singles out La Raza.
Although DOJ responded to the Goodlatte-Hensarling letter in January, it has not yet turned over internal emails sought by the Republicans.
“You can expect that this will escalate if you do not provide the documentation that we requested two months ago,” Goodlatte told DOJ’s Geoffrey Graber, a deputy associate attorney general, at Thursday’s hearing.
It almost makes you miss Benghazi.
Should Home-Sellers Pay the Settlement Costs of Buyers?
“In an effort to sell my house I agreed to pay up to $8,000 of the buyer’s closing costs. Is there anything I can do to keep the amount as far below $8,000 as possible?”
At this point, no. If you agreed to pay “up to” $8,000 of the buyer’s costs, you will almost surely end up paying $8,000, or very close to it.
Why a Seller’s Commitment Is Almost Bound to Be Fully Used
If the buyer is astute, any part of the $8,000 that is not needed to pay the lender’s fixed-dollar fees or third party fees will be used to pay points that reduce the borrower’s interest rate. This is called “buying down the rate.”
Points are lender fees expressed as a percent of the loan balance, and lenders trade off points against the interest rate. Low rates require high points, high rates command negative points called “rebates.” Points are settlement costs and are therefore covered by the seller’s commitment. The astute borrower will use any part of your $8,000 that is left over as points that reduce his rate.
If the borrower is not aware of his option to buy down the rate, the excess very likely will end up in the pocket of the loan officer or mortgage broker. Where it will not end up is back with you, the seller.
Rationale For the Practice of Home Sellers Paying Settlement Costs
The practice of home sellers paying all or part of a buyer’s mortgage settlement costs arises from the effort to qualify potential home buyers who don’t have quite enough cash. A potential home seller looking to net $300,000 for her house may broaden the market by pricing the home at $308,000 combined with an offer to pay up to $8,000 in settlement costs. Paying $308,000 for a house with the seller committed to paying $8,000 in settlement costs permits a larger loan and therefore requires less cash from the cash-short buyer than paying $300,000 without the commitment.
For example, assume the borrower is putting 10% down and settlement costs are $8,000. If the price is $300,000, the buyer needs cash equal to 10% of $300,000, which is $30,000, plus $8,000 in costs, which add to $38,000. When the price is $308,000 with no costs, the buyer needs only 10% of $308,000, or $30,800. Hence, if the buyer can come up with $30,800 but not $38,000, the higher price with a settlement cost commitment has succeeded in expanding the market.
Provisos
The major proviso is that the appraised value must match the price inclusive of the settlement costs. In the example, the appraiser must report that the house is worth at least $308,000. If the house is appraised at $300,000, the buyer’s cash requirement won’t be reduced. In the years prior to the financial crisis, appraisals were largely accommodative, today less so.
A second proviso is that the seller’s contribution must fall within the lender’s guidelines. Lenders restrict contributions, based on how much the buyer is putting down. Fannie Mae and Freddie Mac set a limit of 3% of the price when the down payment is 10%, so the contribution in my example would be an acceptable 2.6%. Note that FHA allows contributions up to 6% regardless of the down payment.
I sometimes run into larger contributions where the payment by the seller is made outside of closing so it can be concealed from the lender. That is a fraud.
Will the Buyer Receive the Full Benefit of the Seller’s Contribution?
The cash constrained buyer who agrees to pay $308,000 to receive an $8,000 contribution should aim to use the $8,000 to pay fixed-dollar lender fees (those not related to loan size) plus third party charges such as title insurance, and use whatever is left to buy down the interest rate by paying points. For example, if fixed-dollar lender fees are $800 and third party charges $2200, the $5,000 remaining should buy down the rate on a 30-year fixed-rate mortgage of $277,200 (90% of $308,000) by about 0.75%.
But an avaricious loan provider can easily thwart this strategy unless the buyer knows how to protect himself. If the buyer is dealing with a mortgage broker, the $5,000 may end in the broker’s pocket as extra compensation. The buyer can protect himself against this by negotiating the broker’s fee from all sources in advance, and putting it in writing.
If the buyer is dealing with an avaricious loan officer (LO) employed by the lender, the $5,000 likely will be used to pay points, but the interest rate may not be any lower than it would have been without the payment. To protect herself, the buyer needs to know the competitive rate on her transaction inclusive of the $5,000 in points. She also needs to be able to monitor the price until it is locked. The only effective way to do this is to access an on-line site such as mine that provides transaction-specific prices.
Buyers should be particularly wary of offers by builders that they will pay all settlement costs if the buyer uses the builder’s preferred lender. The interest rate paid by buyers accepting this attractive-sounding offer is bound to be higher than the rate available from a competitive lender providing a rebate large enough to cover the same settlement costs.
Visit my website to compare prices from multiple lenders.
At this point, no. If you agreed to pay “up to” $8,000 of the buyer’s costs, you will almost surely end up paying $8,000, or very close to it.
Why a Seller’s Commitment Is Almost Bound to Be Fully Used
If the buyer is astute, any part of the $8,000 that is not needed to pay the lender’s fixed-dollar fees or third party fees will be used to pay points that reduce the borrower’s interest rate. This is called “buying down the rate.”
Points are lender fees expressed as a percent of the loan balance, and lenders trade off points against the interest rate. Low rates require high points, high rates command negative points called “rebates.” Points are settlement costs and are therefore covered by the seller’s commitment. The astute borrower will use any part of your $8,000 that is left over as points that reduce his rate.
If the borrower is not aware of his option to buy down the rate, the excess very likely will end up in the pocket of the loan officer or mortgage broker. Where it will not end up is back with you, the seller.
Rationale For the Practice of Home Sellers Paying Settlement Costs
The practice of home sellers paying all or part of a buyer’s mortgage settlement costs arises from the effort to qualify potential home buyers who don’t have quite enough cash. A potential home seller looking to net $300,000 for her house may broaden the market by pricing the home at $308,000 combined with an offer to pay up to $8,000 in settlement costs. Paying $308,000 for a house with the seller committed to paying $8,000 in settlement costs permits a larger loan and therefore requires less cash from the cash-short buyer than paying $300,000 without the commitment.
For example, assume the borrower is putting 10% down and settlement costs are $8,000. If the price is $300,000, the buyer needs cash equal to 10% of $300,000, which is $30,000, plus $8,000 in costs, which add to $38,000. When the price is $308,000 with no costs, the buyer needs only 10% of $308,000, or $30,800. Hence, if the buyer can come up with $30,800 but not $38,000, the higher price with a settlement cost commitment has succeeded in expanding the market.
Provisos
The major proviso is that the appraised value must match the price inclusive of the settlement costs. In the example, the appraiser must report that the house is worth at least $308,000. If the house is appraised at $300,000, the buyer’s cash requirement won’t be reduced. In the years prior to the financial crisis, appraisals were largely accommodative, today less so.
A second proviso is that the seller’s contribution must fall within the lender’s guidelines. Lenders restrict contributions, based on how much the buyer is putting down. Fannie Mae and Freddie Mac set a limit of 3% of the price when the down payment is 10%, so the contribution in my example would be an acceptable 2.6%. Note that FHA allows contributions up to 6% regardless of the down payment.
I sometimes run into larger contributions where the payment by the seller is made outside of closing so it can be concealed from the lender. That is a fraud.
Will the Buyer Receive the Full Benefit of the Seller’s Contribution?
The cash constrained buyer who agrees to pay $308,000 to receive an $8,000 contribution should aim to use the $8,000 to pay fixed-dollar lender fees (those not related to loan size) plus third party charges such as title insurance, and use whatever is left to buy down the interest rate by paying points. For example, if fixed-dollar lender fees are $800 and third party charges $2200, the $5,000 remaining should buy down the rate on a 30-year fixed-rate mortgage of $277,200 (90% of $308,000) by about 0.75%.
But an avaricious loan provider can easily thwart this strategy unless the buyer knows how to protect himself. If the buyer is dealing with a mortgage broker, the $5,000 may end in the broker’s pocket as extra compensation. The buyer can protect himself against this by negotiating the broker’s fee from all sources in advance, and putting it in writing.
If the buyer is dealing with an avaricious loan officer (LO) employed by the lender, the $5,000 likely will be used to pay points, but the interest rate may not be any lower than it would have been without the payment. To protect herself, the buyer needs to know the competitive rate on her transaction inclusive of the $5,000 in points. She also needs to be able to monitor the price until it is locked. The only effective way to do this is to access an on-line site such as mine that provides transaction-specific prices.
Buyers should be particularly wary of offers by builders that they will pay all settlement costs if the buyer uses the builder’s preferred lender. The interest rate paid by buyers accepting this attractive-sounding offer is bound to be higher than the rate available from a competitive lender providing a rebate large enough to cover the same settlement costs.
Visit my website to compare prices from multiple lenders.
Perception Trumps Reality in National Mortgage Settlement
In the past couple of months several of my bankruptcy clients received letters from Bank of America releasing them from all liability on second mortgages. What was strange is their mortgages were already scheduled to be discharged in a bankruptcy anyway, and the court had sent notice to Bank of America of that fact. A little research disclosed the reason for Bank of America’s largesse. On August 21, 2014, the Department of Justice had negotiated a mortgage settlement with Bank of America requiring it to meet certain benchmarks for mortgage forgiveness or face harsh penalties. By allowing Bank of America to pad its statistics by including mortgages scheduled for a bankruptcy discharge, DOJ was following on the well trod path of laissez faire oversight that caused the Wall Street collapse in the first place.
Senator Elizabeth Warren famously criticized the Department of Justice (“DOJ”) for settling claims against Wall Street banks rather than prosecuting the individuals responsible for the economic collapse in 2008. DOJ justified its actions by pointing out the billions of dollars in settlements it had exacted from Wall Street’s bad actors. One media outlet complained the settlement foisted part of the cost on the American taxpayer by allowing BOA to deduct the settlement penalty on its taxes. Another derided DOJ’s estimate of the billions in penalties BOA has paid as wildly inflated.
Like Alice Through the Looking Glass, nothing is at it appears to be. Or to parody a line from Jurassic Park, life, or in this case, big business will find a way. Apparently the perception that DOJ is getting tough with businesses like Bank of America is more important than the reality.
Follow Richard Gaudreau on Twitter: www.twitter.com/gaudreaulaw
Senator Elizabeth Warren famously criticized the Department of Justice (“DOJ”) for settling claims against Wall Street banks rather than prosecuting the individuals responsible for the economic collapse in 2008. DOJ justified its actions by pointing out the billions of dollars in settlements it had exacted from Wall Street’s bad actors. One media outlet complained the settlement foisted part of the cost on the American taxpayer by allowing BOA to deduct the settlement penalty on its taxes. Another derided DOJ’s estimate of the billions in penalties BOA has paid as wildly inflated.
Like Alice Through the Looking Glass, nothing is at it appears to be. Or to parody a line from Jurassic Park, life, or in this case, big business will find a way. Apparently the perception that DOJ is getting tough with businesses like Bank of America is more important than the reality.
Follow Richard Gaudreau on Twitter: www.twitter.com/gaudreaulaw
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