Wall street is becoming the biggest slumlord in human history.
Ten major financial firms agreed on Monday to pay $3.3 billion in cash to settle allegations of mortgage fraud by the Office of the Comptroller of the Currency (OCC) in the latest in a string of sweetheart settlements between the major Wall Street banks and their nominal regulators. As usual, there were no criminal charges and no bank officials were held accountable.
The settlement, which nominally totals $8.5 billion, includes $3.3 billion in direct payments to borrowers and $5.2 billion in loan modifications and other forms of “borrower assistance” left largely at the discretion of the banks.
The settlement with the OCC, a branch of the Treasury Department, relates to widespread fraud committed by the banks in their rush to foreclose on as many homes as possible in 2009 and 2010. To expedite the foreclosure process, the banks had employees or contractors sign off on thousands of mortgage documents every month, swearing that they had intimate knowledge of their contents when in reality they had not even read them.
In many cases, banks illegally imposed fees on targeted homeowners or failed to inform them of their rights.
In concluding the pittance of a settlement, a fraction of the billions taken in by the banks from the sub-prime mortgage racket, the Obama administration is once again letting the banks get away with massive crimes that have had devastating social consequences, while giving them a green light to continue similar practices.