Florida Attorney General Pam Bondi issued a news release yesterday (you can read the full text of her press release below) that asks Floridians to help decide how the big fat settlement from the five big banks (Ally/GMAC;Bank of America; Citi; JPMorgan Chase; and Wells Fargo) for all their Foreclosure Fraud (robosigning, etc.) evildoing activities should be spent.
You and I have until May 14, 2012, to send Pam Bondi our ideas on how around $300,000,000 should be used.
This isn’t all that the State of Florida got from these five lenders (read our earlier post here that gives details on these banks’ bad acts, including full text reports of the government investigation findings). Florida got $8.4 billion as a total settlement, but most of that money has already been divided up to pay for things like home loan mortgage modifications and reductions to mortgage principle balances.
Bondi is asking for public input on how to spend a part of the settlement proceeds that weren’t allocated to specific uses as part of the deal, other than to provide for “consumer relief.”
Larry Tolchinsky’s Tip:
It’s nice that Pam Bondi is asking all of us to voice our opinions about how that money should be spent, and hopefully each and every opinion will be read and considered. However, to think that this big settlement is the end of the ForeclosureFraud mess is wrong, and reading these big settlement amounts as a suggestion that we’re all done but for the clean up isn’t accurate.
For one thing, this settlement is just concerning these five mortgage lenders. That’s all. There’s a lot more financial institutions involved in this Wild West mess than these banks.
Consider the news story in last week’s Sun Sentinel about the complications in determining who owns what title. In an article entitled, “Who owns that dirty, foreclosed house? It’s complicated,” investigative reporter Megan O’Matz reports that authorities are having big problems determining who is responsible for paying the upkeep on abandoned properties because the real estate titles are in chaos.
Seems that Code Compliance in various Florida areas are having a big problem finding who is the legal owner of abandoned properties in order to force them to do things like clean the place up and remove the neighborhood eyesores and community environment dangers. Why? It’s a spaghetti bowl of names to sort through – mortgage lenders, servicers, trustees, etc. – on each tract of land and apparently, a lot of finger pointing among the financial institutions that they’re not responsible for paying the upkeep expenses.
Add to this other issues we’ve already been monitoring: other banks and credit unions have been foreclosing and going after deficiency judgments steadily over the past few years; appraisal fraud and evildoing appraisers have monkeyed with real estate values; title companies treading carefully in issuing new title policies; and the inability of anyone to find a solution to the huge backlog in foreclosure dockets in Florida (it’s around two and a half years now), and it’s easy to understand that Florida still has a huge mess to fix.
Which means that individual Floridians need to be very careful in all their real estate dealings. Now is not the time to make decisions without the advice and guidance of an experienced Florida real estate attorney.
If you have questions or comments, please feel free to Chat with Larry in the comments below, at firstname.lastname@example.org or (954) 458-8655.
Below, the complete news release from Florida AG Pam Bondi:
Attorney General Pam Bondi News Release
April 30, 2012\Media Contact: Jenn Meale\Phone: (850) 245-0150
Attorney General Pam Bondi Seeks Public Input on Distribution of $300 Million in Settlement Funds for Housing-Related Programs
TALLAHASSEE, Fla.—Attorney General Pam Bondi invites the public to make suggestions on how best to distribute approximately $300 million recovered on behalf of Florida’s consumers in the national mortgage servicing settlement. From Monday, April 30, through Monday, May 14, at 5 p.m., the public can submit suggestions to the Attorney General’s Office by visiting MyFloridaLegal.com.
“Florida is one of the hardest hit states in the country in terms of foreclosures, and I’d like to hear from Floridians about ways we can help homeowners and offset the devastation caused by the foreclosure crisis,” stated Attorney General Pam Bondi.
In the next several weeks, Attorney General Bondi will be evaluating input from the public, interested stakeholders, and representatives of the Governor’s Office and the Legislature before distributing settlement funds.
In February 2012, Attorney General Pam Bondi entered a $25 billion joint federal-state agreement with the nation’s five largest mortgage servicers over foreclosure abuses and unacceptable nationwide mortgage servicing practices. The court-approved settlement calls for the Attorney General to direct approximately $300 million in consumer relief for purposes intended to avoid preventable foreclosures, to ameliorate the effects of the foreclosure crisis, and to enhance law enforcement efforts against financial fraud.
The settlement agreement lists permissible uses of the settlement funds, including: housing counselors, state and local foreclosure assistance hotlines, state and local foreclosure mediation programs, legal assistance, housing remediation and anti-blight projects, and training and staffing of financial fraud or consumer protection enforcement efforts. More information regarding the uses of these settlement funds can be found under “Exhibit B” of the final settlement agreement. Mortgage Settlement Link