Compensation Fund Proposal An Attempt To Buy Off State AGs, Keep Them From "Digging Deeper & Uncovering More Rot In The Mortgage System": Legal Expert

Buried in a recent New York Times story on the ongoing foreclosure scandal is this excerpt describing one legal expert's view of the banking industry's latest attempt to sweep their wrongdoing under the rug:

• For 18 months, the Obama administration has promoted modifications that would keep families in their homes over foreclosures that would kick them out. The programs have had some success but ultimately have done little to stem the tide.

• “The banks’ act was to put their tail between their legs, act contrite before Congress and change nothing,” said Adam Levitin, an associate profesor of law at Georgetown University who testified before Congress on Tuesday and will testify again on Thursday.

• The banks hope to buy off the attorneys general with money, perhaps to establish a compensation fund for victims, Mr. Levitin said. That, he said, would prevent attorneys general from “digging deeper and uncovering more rot in the mortgage system. My fear is that the banks’ calculus is correct.”

Source: Foreclosure Fix Is Seen as Distant.