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Federal Reserve Admits Fraudclosure Victims Being Shortchanged

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After handing out trillions of dollars to Wall Street – which we only know about due to a Bloomberg News lawsuit the Fed fought – the Federal Reserve announced victims of fraudulent foreclosure practices were being shortchanged.

A multi-bank settlement with regulators over past foreclosure abuses ran into new problems when some borrowers received smaller checks than they should have, the Federal Reserve said on Wednesday.

Some 4.2 million people are receiving checks as part of the deal mortgage servicers reached with the Office of the Comptroller of the Currency (OCC) and the Fed to settle allegations they improperly foreclosed on borrowers and made other processing mistakes during the U.S. housing crisis.

It only makes sense that a process that was a disaster from the beginning should end this way.

The amounts of the checks were determined based on rubrics approved by regulators. But the Fed said it became aware on Tuesday that some consumers whose loans were serviced by units of Goldman Sachs or Morgan Stanley had received checks for less than they amount they should have received.

About 96,000 people received the wrong amounts, the Fed said.

One more swift kick to people that are down as Wall Street walks away richer from millions wrongly losing their homes. Lesson: Crime pays.

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Dan Wright

Dan Wright

Daniel Wright is a longtime blogger and currently writes for Shadowproof. He lives in New Jersey, by choice.