Originally posted by cmonaussie
Just how expensive can mortgage (legal) settlements become?
Still on GS (so yet another "scandal" that was long in the making)
GS-home-mortgage-settlements
Bolding is my emphasis
"Goldman Sachs is approaching the billion-dollar mark for mandated consumer-relief actions stemming from two mortgage-related settlement agreements with the U.S. Department of Justice and three states" ...
"Since his previous report on February 15, 2018, Goldman Sachs has
forgiven $61,610,295 in principal on 666 first-lien mortgages, Professor Green reported. The
average principal forgiveness for the loans was $92,508, and the reportable credit toward the total owed was $75,278,610, “after the application of appropriate crediting calculations and multipliers.”
"The
modified mortgages were located in 41 different states and the District of Columbia. Professor Green also reported that 26 percent of the relief occurred in New York, Illinois, and California, and 45 percent of the credit was in the Hardest Hit Areas, “census tracts identified by the U.S. Department of Housing and Urban Development as
containing large concentrations of distressed properties and foreclosure activities.”"
“...
legal claims against Goldman Sachs regarding the marketing, structuring, arrangement, underwriting, issuance, and
sale of mortgage-based securities.” Goldman Sachs settled with the DOJ, California, Illinois, and New York, as well as the National Credit Union Administration Board and the Federal Home Loan Banks of Chicago and Des Moines.
Goldman Sachs has until the end of January 2021 to meet its requirement of paying “a total of $5.06 billion, including consumer relief valued at $1.8 billion.”
Now $2.96B of that goes to DoJ, $325M to State of CA, NY, IL and $75M to FHLBs in Chicago & Des Moine (call it a fine sort of - no wrongdoing admitted I believe). That may not be news to us and settlement is for MBS and not the actual mortgage itself which would have been from retail banks mostly.
However its the HomeOwner claims that are of interest and probably also gets to Naga's earlier point
From the website
https://goldmansachs.mortgagesettlementmonitor.com/
Options for assistance may include:
Repayment Plan
Allows you to pay past due amounts on your loan over a specified time period to bring your loan current. Each plan payment includes your regular monthly payment plus a portion of the past due amount. The term of the plan will vary based on your ability to repay.
Loan Modification
Allows for permanent changes to the terms of your loan. Loan modification options may be available to you even if you have already been denied or granted a loan modification in the past. This may include any of the following:
* Lower total debt, including forgiveness of a portion of the amount owed
* Fixed interest rate
* Reduced monthly payment
* A mutual agreement between you and Rushmore whereby Rushmore, on behalf of the loan owner, agrees to accept less than the full amount of your loan balance in full satisfaction of your loan. You retain full ownership of your home
Naga ... would I be correct in assuming that given the concentration of mortgages held in the DSIBs that say $5B per bank in "liabilities" per bank isn't out of the question?
Laws in Australia are different to the US.
This precedence case may be worth a read
Who is Liable - Lender or Broker
Summarises
Justice Macfarlan has provided a significant win for mortgage lenders. His Honour considered:
"... that a mortgage broker who communicated to a mortgage lender or mortgage manager that it had a client who wanted to borrow money and who signed a loan application and associated documents would reasonably be understood to have been representing the truth of those matters, they being fundamental to the existence of the relation of the lender and Mr Kotevski that the mortgage broker was proposing to create."
Traditionally, a mortgage broker's role in the granting of a loan is the preparation and gathering of relevant documents and materials in support of the application, which is forwarded to the lender and/or it's agent for processing.
This decision broadens the scope of the mortgage broker's liability in the loan application process. A mortgage broker will be held liable for loss or damage caused to a lender, following any representations made, however minor they might be, if they are relied upon by the lender in granting the loan.
Trouble is aren't the biggest brokers also owned by the DSIBs - e.g. WBC owns RAMS and also a significant portion of online broker Uno.
Will it be to little to late
WBC-broker-crackdown
Originally posted by cmonaussie
Just how expensive can mortgage (legal) settlements become?
Still on GS (so yet another "scandal" that was long in the making)
GS-home-mortgage-settlements
Bolding is my emphasis
"Goldman Sachs is approaching the billion-dollar mark for mandated consumer-relief actions stemming from two mortgage-related settlement agreements with the U.S. Department of Justice and three states" ...
"Since his previous report on February 15, 2018, Goldman Sachs has
forgiven $61,610,295 in principal on 666 first-lien mortgages, Professor Green reported. The
average principal forgiveness for the loans was $92,508, and the reportable credit toward the total owed was $75,278,610, “after the application of appropriate crediting calculations and multipliers.”
"The
modified mortgages were located in 41 different states and the District of Columbia. Professor Green also reported that 26 percent of the relief occurred in New York, Illinois, and California, and 45 percent of the credit was in the Hardest Hit Areas, “census tracts identified by the U.S. Department of Housing and Urban Development as
containing large concentrations of distressed properties and foreclosure activities.”"
“...
legal claims against Goldman Sachs regarding the marketing, structuring, arrangement, underwriting, issuance, and
sale of mortgage-based securities.” Goldman Sachs settled with the DOJ, California, Illinois, and New York, as well as the National Credit Union Administration Board and the Federal Home Loan Banks of Chicago and Des Moines.
Goldman Sachs has until the end of January 2021 to meet its requirement of paying “a total of $5.06 billion, including consumer relief valued at $1.8 billion.”
Now $2.96B of that goes to DoJ, $325M to State of CA, NY, IL and $75M to FHLBs in Chicago & Des Moine (call it a fine sort of - no wrongdoing admitted I believe). That may not be news to us and settlement is for MBS and not the actual mortgage itself which would have been from retail banks mostly.
However its the HomeOwner claims that are of interest and probably also gets to Naga's earlier point
From the website
https://goldmansachs.mortgagesettlementmonitor.com/
Options for assistance may include:
Repayment Plan
Allows you to pay past due amounts on your loan over a specified time period to bring your loan current. Each plan payment includes your regular monthly payment plus a portion of the past due amount. The term of the plan will vary based on your ability to repay.
Loan Modification
Allows for permanent changes to the terms of your loan. Loan modification options may be available to you even if you have already been denied or granted a loan modification in the past. This may include any of the following:
* Lower total debt, including forgiveness of a portion of the amount owed
* Fixed interest rate
* Reduced monthly payment
* A mutual agreement between you and Rushmore whereby Rushmore, on behalf of the loan owner, agrees to accept less than the full amount of your loan balance in full satisfaction of your loan. You retain full ownership of your home
Naga ... would I be correct in assuming that given the concentration of mortgages held in the DSIBs that say $5B per bank in "liabilities" per bank isn't out of the question?
Laws in Australia are different to the US.
This precedence case may be worth a read
Who is Liable - Lender or Broker
Summarises
Justice Macfarlan has provided a significant win for mortgage lenders. His Honour considered:
"... that a mortgage broker who communicated to a mortgage lender or mortgage manager that it had a client who wanted to borrow money and who signed a loan application and associated documents would reasonably be understood to have been representing the truth of those matters, they being fundamental to the existence of the relation of the lender and Mr Kotevski that the mortgage broker was proposing to create."
Traditionally, a mortgage broker's role in the granting of a loan is the preparation and gathering of relevant documents and materials in support of the application, which is forwarded to the lender and/or it's agent for processing.
This decision broadens the scope of the mortgage broker's liability in the loan application process. A mortgage broker will be held liable for loss or damage caused to a lender, following any representations made, however minor they might be, if they are relied upon by the lender in granting the loan.
Trouble is aren't the biggest brokers also owned by the DSIBs - e.g. WBC owns RAMS and also a significant portion of online broker Uno.
Will it be to little to late
WBC-broker-crackdown
The challenge is understanding where the bank actually starts and ends. the wholesale finance the banks were doing for the non bank lenders until the non bank lenders moved the laons into RMBS is technically extending the bank into non bank lending because they carry the risk in transition, sure the mortgages eventually get palmed off as a security for some poor sucker to buy but its only a fair weather model in that you cant do it unless the market is expanding and youre not getting supervised to closely . The question is where do the non banker lenders go to find capital now and whether it represents a further restriction in credit in a tightening cycle
(20min delay)