Meh, $2,000 - the cost of doing business (photo: marlot/flickr)

Meh, $2,000 - the cost of doing business (photo: marlot/flickr)

Before the terms of the settlement was announced, I wrote the following as part of  a reply to one of Cynthia Kouril’s always great posts concerning foreclosure fraud and the settlement:

The servicing of the mortgages is where all the real human pain of foreclosure dwells. This was where the actual foreclosure frauds that most intimately and severely impacted the actual homeowners took place – the document fraud and forgery, the non-delivery (sewer service) of notices, the cat-and-mouse game of we’re modifying you, oops! we lied and we’re really foreclosing, the force-placed insurance, the perjuries to the courts about the file review being accurate, the inflated and bogus fees, the unaccounted for payments, etc.

Let us not ever forget that in Congressional testimony there are homeowner attorneys saying that half of their cases involved “servicer induced foreclosure”, that is that the homeowner was literally driven into foreclosure by the actions of the servicers.

This is what is being “settled”. What is a commensurate fine for these illegal and rotten practices that made many innocent homeowners homeless? It has to be more than a tiny fraction of their profits. It has to be deep and painful and it has to offer more than a pittance to the homeowners as compensation. You’ll never make them whole, because they lost their homes.

I wrote that before knowing what the terms of the settlement were. And now we know.

The Justice Department and all the  State Attorneys General pooled their legal intellects, their staffs, their time, their energy and their passion for justice to  bring the full force and weight of an incredible prosecutorial juggernaut to bear on the banking and mortgage servicer industries to settle a civil fine and penalty for their criminal behaviors.  If you lost your house to foreclosure fraud or a servicer induced default you will be entitled to receive . . . . . . $2000.00

No, that’s not a misprint. TWO THOUSAND DOLLARS.

That is right in line with what some servicers have been paying foreclosed homeowners in “cash for keys” in order to avoid eviction proceedings when a foreclosure is final. To the servicer or the foreclosure mill it is in the category of a “nuisance fee”.

So, are we to understand that the full force and pressure of the US State Justice Department and all the fifty states combined were able to wrestle from the miscreants a settlement for the wrongly foreclosed homeowners that translates into the same financial category as a nuisance fee in a foreclosure? An amount that is easily absorbed as “the cost of doing business”? An amount that is less than some speeding fines?

Does it meet the criteria that I laid out earlier:

More than a tiny fraction of profits?      No.

Deep and painful?    No.

More than a pittance to the homeowners who lost their homes?  No.

In short, it is a freaking disgrace.

BUT WAIT, we have to remember that the individual homeowner still has the ability to sue the Behemoths themselves! And of course the individual homeowner and their Legal Aid attorney will be able to get a more equitable settlement? Think about that – if it’s true than the settlement is an even  greater travesty than thought possible. If it is not true it will be because the settlement has established a baseline for the damages as two thousand dollars.

A settlement per homeowner of this minimal amount should serve as a wake-up call, if any were still needing one, that in this country the Justice is for the 1% at the expense of the 99%.