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January 10, 2013

US foreclosure settlement angers Wall Street critics

A multibillion-dollar settlement announced Monday between US financial regulators and major banks over alleged abuses related to home foreclosures is the latest example of the financial industry running roughshod over the rule-of-law without repercussions, Wall Street critics said.

“The bottom line is: Fraud pays, and it pays big time,” William Black, a former federal bank regulator and a professor of economics and law at the University of Missouri-Kansas City, told RIA Novosti.

The US Office of the Comptroller of the Currency (OCC) and the US Federal Reserve said they had reached an $8.5 billion settlement with 10 banks and mortgage firms that would halt independent reviews of their mortgage servicing and foreclosure processing practices.

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“But critics of both deals say these settlements send a message to the American people that Wall Street gets a slap on the wrist for behavior that lands people on Main Street behind bars.

Robo-signing and other types of foreclosure fraud are tantamount to perjury, said Dennis Kelleher, the head of Better Markets, a Washington-based nonprofit that lobbies for tighter regulation of the US financial industry.

“You or I would be in jail for a very long time if we filed a bunch of affidavits we knew were false,” said Kelleher, a former senior aide in the US Senate.”

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“Monday’s settlement would halt those case-by-case reviews, a decision US Comptroller of the Currency Thomas Curry said would provide quicker relief for struggling homeowners.

“Our new course of action will get more money to more people more quickly, and it will speed recovery in the nation’s housing markets,” Curry said in a statement.

That provision of the deal essentially means the public will likely never learn the full extent of the most egregious foreclosure practices, Kelleher said.

“That conduct is never going to see the light of day now,” he said. “So once again the banks are going to be able to hide their illegal conduct, and apparently there is going to be almost no public disclosure of it.””

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Read full Rapsi article here

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