Excerpt:
The agreement with the 49 state attorneys general, the Justice Department and the Department of Housing and Urban Development settles a wide-range of foreclosure abuses from improperly prepared affidavits to allegedly forged notarization signatures and botched modification attempts.
The five servicers, Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial will provide $17 billion in different forms of homeowner relief, $5 billion in remediation payments to borrowers and $3 billion in fines to the states.
Because of the way the relief was structured into partial credits, the total amount of principal reduction and other actions could total as high as $40 billion, according to some government estimates.
The deal was originally announced in February after more than one year of negotiations, and it was filed in court in March.
Yes, $25B sounds like a lot of money, but this is a pathetic slap on the wrist for lenders who screwed thousands of borrowers out of billions of dollars. The final arithmetic is that the fraud committed was profitable, even after these “punitive” judgments. The $5B in remediation payments to borrowers works out to about $6,000 each – an insult in view of the magnitude of the fraud committed. If any of us had committed any of these crimes, we’d be in jail.