50 State Attorney General Mortgage Probe Rejects Idea of Global SettlementSubmitted by bobbyw24 on Thu, 11/25/2010 - 13:40
Bloomberg provided a useful update on the 50 state attorney generals’ investigation into mortgage abuses.
One key development is that the AGs are treating investors as parties whose interests need to be considered. This appears to be at odds with the approach taken by Federal regulators, who are devising and implementing exams of various sorts which look to be purposely superficial (well, of course, if the real agenda is to change things as little as possible, you don’t need to do much outreach). Another is that the AGs have rejected the idea of a global settlement and are instead looking at a bank-by-bank approach (although presumably there will be some common elements across all deals).
But there are some inconsistencies in the piece, which suggests the spin is hot and heavy. For instance, the article does the reader the disservice of repeating the canard that principal mods hurt investors, although it finally offers this comment:
Banks have suggested the securities owners may block a settlement that includes loan modifications, said Chris Katopis, executive director of the Association of Mortgage Investors.
“The servicers are painting us as a convenient patsy,” he said. “We find it absolutely inaccurate that we’re holding up the modification process.”