Pity Shaun Donovan. The much beset upon Housing and Urban Development secretary has the thankless task of facilitating that long sought after agreement between the state attorneys general and the banks, the one that would finally put that nasty robo-signing scandal behind us. Long anticipated, it was supposed to be signed by Christmas (not).
The Obama administration came under fire Monday from U.S. Democratic lawmakers and liberal groups, who argued that a forthcoming settlement over alleged foreclosure abuses won’t do enough to penalize the banking industry.
Administration officials and state attorneys general are have been putting the finishing touches on a settlement with major banks of foreclosure-processing problems that erupted into public view in fall 2010.
Housing and Urban Development Secretary Shaun Donovan and Associate U.S. Attorney General Thomas Perrelli were meeting in Chicago on Monday with Democratic attorneys general to review potential settlement terms, according to a spokesman for Iowa Attorney General Tom Miller, who has been leading the talks.
The officials were scheduled to hold a separate conference call with Republican attorneys general later in the day, but no announcement of a settlement was expected this week.
NEW YORK (TheStreet) — Private antitrust litigation pitting some five million retailers against Visa , MasterCard , and 13 large banks, including Bank of America , CitigroupCapital One Financial , JPMorgan Chase , U.S. Bancorp , Wells Fargo , PNC Financial , Fifth Third Bancorp , SunTrust Banks , HSBC and Barclays Plc has slipped under the radar of many analysts and investors who follow those companies, but the case may deliver a multi-billion dollar shock to bank bulls in the coming months.
Estimates of the potential cost of a settlement of the antitrust case vary dramatically–from a few billion dollars into the hundreds of billions. At least as worrisome to the financial companies
Baltimore Rep. Elijah E. Cummings on Wednesday requested that the House Oversight Committee issue subpoenas to six banks he said have refused to voluntarily provide documents detailing their role in the mortgage foreclosure meltdown.
Cummings, the top-ranking Democrat on the committee who has made the foreclosure issue a top priority, said the documents are needed to help the committee determine how the foreclosure crisis unfolded. He said it is his first request for subpoenas since starting in the position in January.
HSBC North America Holdings, the nation’s ninth-largest bank by assets, warned investors Monday of impending fines after receiving notice from federal bank regulators admonishing the lender for improper foreclosure practices.
The bank is the latest in a string of large financial companies that have used recent securities filings to prep investors for fines and a significant increase in costs associated with processing mortgages and repossessing homes, after being cited by regulators for deficient and sometimes illegal operations. On Friday, Ally Financial, Wells Fargo & Co., and SunTrust Banks — three of the nation’s 10 largest handlers of home mortgages — said in regulatory documents that they expect to be sanctioned by the U.S. government for their foreclosure practices.
The penalties follow months-long criminal and civil probes by federal and state regulators into lenders’ mortgage practices. Officials said they found significant shortcomings and violations of various state laws. A “small number” of foreclosures should not have occurred, John Walsh, the interim head of the Office of the Comptroller of the Currency, the federal regulator of national banks, told a Senate committee earlier this month after his agency surveyed less than 3,000 out of millions of loan files.
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