Proof the AG Settlement Failed
I’ve read many good articles, including this one from Abigail Field, explaining why the 25 billion dollar settlement between the Attorneys General and the TBTF banks was a terrible deal for consumers and our country as a whole. For me, though, there is one simple, obvious way to prove this settlement was and is a complete and collosal failure. Simply compare the rate at which banks were filing new foreclosure lawsuits and prosecuting existing foreclosure cases before the settlement to the rates now, after the settlement.
Before the AG settlement was announced, banks were very slow to prosecute existing foreclosure cases and loathe to file new cases. To illustrate, it seems crazy to say so now, but Stopa Law Firm went nearly a year without a single bank setting a hearing on a motion for summary judgment. Think about that for a minute … nearly a year without a single summary judgment hearing (in any of my cases). I like to think that’s partly a product of the banks and their lawyers not wanting to face me in court, but certainly there was more to it than that. Banks were hesitant to prosecute foreclosure cases without a settlement and release from the AGs.
After the AG settlement was announced, banks accelerated the foreclosure process, both in terms of new cases and the prosecution of existing cases. How do I measure the difference? Well, the banks are now proceeding at rates faster than I’ve seen in the four-plus years I’ve been defending Florida homeowners. If banks were a snail before the AG settlement, they’re now a jackrabbit. That’s not to say foreclosure cases cannot be defended any more – they can. But the approach and overall dynamic of foreclosure defense has changed drastically in recent weeks.
As for the key question, i.e. whether the AG settlement was helpful to homeowners, ask yourself this – “if the AG settlement was helpful, why are banks foreclosing faster now, after the settlement, than they were before?”
The settlement should have discouraged abusive practices in the banking industry. Instead, the TBTF banks accepted their slap on the wrist, took their release from the AGs, and began their corrupt and fraudulent practices anew, full speed ahead.
Imagine a professional bank robber stealing $500 million from 20 different banks over a 10-year period, then being “punished” by having to pay back $500,000 with no criminal penalty and no jail time. Wouldn’t the bank robber, after that punishment, go right back to robbing banks? That’s what’s happening here with the AG settlement, only, in America, the bank robber would never escape punishment while the TBTF banks always get off scot-free. That may sound harsh, but, again:
Mark Stopaif the AG settlement was helpful, then why are banks foreclosing faster now, after the settlement, than they were before?
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