Spooked Home Loan Industry Looks To Dodge Criminal Responsibility For Robosigner Mess Through Settlement Talks With State AGs

The Washington Post reports:

• State attorneys general and the country's biggest lenders are negotiating to create a nationwide fund to compensate borrowers who can prove they lost their home in an improper foreclosure, state and industry officials said. The fund would present a solution for both sides, helping banks avoid lengthy and costly court challenges from homeowners and aiding state investigators in their efforts to seek relief for homeowners who were wronged, the officials said.

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• The fund, the first of its kind in the mortgage industry, would mirror victim-compensation efforts set up in recent years in response to the BP oil spill in the Gulf of Mexico, the shootings at Virginia Tech and the terrorist attacks of Sept. 11, 2001. Those were all administered by a specially appointed czar, Kenneth Feinberg, who had the tough task of figuring out what each victim should receive.(1)

For more, see States, mortgage lenders in talks over fund for borrowers in foreclosure mess.

(1) At this point, it may be that homeowners and their attorneys could be better off continuing to bring their cases in court without regard to any attempt by the state attorneys general to intervene on their behalf and reach a monetary "settlement." The lenders should probably be told to take their proposed settlement fund and shove it. This entire problem could have been avoided a couple of years ago had the lenders dealt with this problem in good faith. Their new-found "willingness" to negotiate (and stop their profuse 'bleeding') is just an attempt to wiggle their way off the hook in a matter that, to the extent the government intervenes, it should probably do so in criminal, not civil, court proceedings.