Felix Salmon

The attorney generals’ proposed bank settlement

By Felix Salmon
March 7, 2011

Cheyenne Hopkins, of American Banker, has a great coup today: she’s found the famous 27-page term sheet laying out exactly how the state attorneys general are trying to force mortgage servicers to “change a dysfunctional system”, in the words of Iowa AG Tom Miller. There’s a lot of material in here, and unfortunately I’m a bit pushed for time right now and can’t give it a full go-through until later tonight.

So have at it, and let me know what you find — do you think this will actually result in a lot more principal reductions, as outlined on pages 18-19? I do hope so, but that bit about being “reserved for further discussion” does give me pause. It’s certainly the part which would cause the greatest immediate harm to banks’ balance sheets — much more than any fine the AGs might come up with.

27 Page Settlement

5 comments so far | RSS Comments RSS

Item 1.D: MERS (p7) is a big, fat nothing. I think this is interesting in what it doesn’t say, given the recent defeats MERS has seen. One of the big issues in this whole mess is whether or not the servicers will hold liability for the actions (or inactions) of MERS; if they do, then recording fees owed to counties could easily be hundreds of millions of dollars.

Posted by jamesagain | Report as abusive

Niggling point: The plural of attorney general is attorneys general. Attorney is the noun and general is the adjective.

Posted by thefinite | Report as abusive

Well, I for one and pretty sad that a settlement is being drawn up; I was looking forward to several weeks, if not months of discovery, depositions, an eventual trial and substantial civil damages. A settlement will just “make the problem go away” in the manner that plutocrats love so much.

“The greatest evil is not done in those sordid dens of evil that Dickens loved to paint but is conceived and ordered (moved, seconded, carried, and minuted) in clear, carpeted, warmed, well-lighted offices, by quiet men with white collars and cut fingernails and smooth-shaven cheeks who do not need to raise their voices.”
– C. S. Lewis

Posted by Strych09 | Report as abusive

@thefinite, the weird thing is I got it right in the text. I guess my problem in the headline was the possessive. Attorneys’s general? That can’t be right.

Posted by FelixSalmon | Report as abusive

@Felix Even weirder is that when an attorney general is arguing a case, the Court refers to him/her as “General” So-and-so.

Posted by thefinite | Report as abusive

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