The bank foreclosure settlement that was intended to speed relief to homeowners is having some problems. Probably not a surprise to those already screwed over by the Big Banks.

On Tuesday, some of the first people to receive payouts under the $9.2 billion deal between federal regulators and the mortgage industry called into a government hotline to report that their bank would not cash their check, the Federal Reserve announced in a press release. Though the unspecified problem was eventually resolved, the Federal Reserve noted, the episode is likely to further erode confidence in a program that has failed to deliver on almost every promise made by federal regulators.

From the press release:

The paying agent for checks being sent to borrowers under the Independent Foreclosure Review has assured the Federal Reserve Board that early problems with some checks have been corrected and that funds are available to cash all checks.

Some early recipients of checks informed the Federal Reserve's consumer helpline on Tuesday that they were told their checks could not be cashed. Members of the Board staff contacted the paying agent, Rust Consulting, Inc., and the paying bank, The Huntington National Bank. Rust subsequently corrected problems that led to some checks being rejected.

The Board will continue to monitor the payments closely and encourages borrowers who have concerns or experience difficulties cashing their checks to call Rust at 1-888-952-9105.

As previously announced, on April 12, payments began to 4.2 million borrowers following an agreement reached by federal bank regulatory agencies and 13 mortgage servicers. More than 50,000 people have already cashed or deposited checks.

Earlier this month, the Government Accountability Office (GAO) issued a scathing report on the review process, finding that regulators did not provide proper oversight and that some errors likely went undetected.Regulators also recently released new information suggesting that banks may have made errors in as many as 30 percent of all loans that qualified for a review, a figure far higher than previously reported.

And of course, the regulators did not escape the wrath of Senator Elizabeth Warren.

Warren embarrassed the poor regulators during a Senate Banking Committee hearing last Thursday morning as she demanded to know why they won’t reveal how frequently big banks illegally foreclosed on homeowners, only to be told that information about bank's illegal activities is "proprietary" and may not ever be disclosed.

[Probably not safe for work - language.]

This is your moment of clarity #197: You've probably caught some "year in review" segments. This one has it all - including a lot of stories the mainstream media wants you to forget about. [LeeCamp.net]

Keep fighting,

Lee

From conflict in Syria to the new politics of Egypt; from protests in Greece to the Olympics in London.

As the year draws to a close, Al Jazeera looks back at 2012 and some of the events that changed our world.

A fast look at what made the news, and went viral in video in 2012.

Consider this an open thread, beginning below.

[Caution: This video is graphic and disturbing.]

Attorneys representing the family of Ernest Duenez Jr. on Wednesday released dash cam video of a fatal police shooting, in which the 34-year-old man was shot to death by police.

Police in Manteca, California had attempted to arrest Duenez last year for violating his parole. Duenez, who was considered armed and dangerous, was shot eleven times after exiting a pick-up truck that had pulled up to his home.

Officer John Moody said Duenez advanced towards him armed with a knife, despite orders not to move. Moody fired 13 rounds in 4.2 seconds, striking Duenez several times. Duenez's wife can be seen coming out of the house and screaming after her husband is shot.

Oakland civil rights attorney John Burris, who represented the family of Oscar Grant in another high-profile police shooting case, claims that Duenez was unarmed and had caught his foot in a seatbeat shortly before being shot.

The dash cam video was released after the San Joaquin County District Attorney’s Office concluded that Moody was legally justified in using lethal force.

Close inspection of the video by experts found that a knife is visible, the D.A.'s office said.

But members of Duenez's family said they don't see a weapon when they watch the video, or any sign that Duenez was threatening the officer.

"There's nothing showing this officer, this trained officer, was threatened," said Duenez's mother, Rosemary.

The family said they released the video in an effort to get federal authorities to review the case.

[Photo Credit: Joshua Roberts/Bloomberg]

By Paul Kiel, ProPublica

An executive who the Justice Department says facilitated a scheme to defraud Fannie Mae and Freddie Mac is now spearheading JPMorgan Chase's role in the government's program to compensate victims of the big banks' abusive foreclosure practices.

The executive, Rebecca Mairone, worked at Countrywide and Bank of America from 2006 until earlier this year, when she left for JPMorgan Chase, according to her LinkedIn profile.

In a lawsuit filed last month in federal court in New York, Justice Department attorneys allege that Countrywide, which was bought by Bank of America in 2008, perpetrated a two-year scam to foist shoddy home loans on Fannie and Freddie. Neither Mairone nor any other individuals are named as defendants in the civil suit, and no criminal charges have been filed against her or anyone else in connection with the alleged misconduct. But Mairone is one of two bank officials cited in the suit as having repeatedly ignored warnings about the "Hustle," as the alleged scheme was called inside the company, and she prohibited employees from circulating some of those warnings outside their division.

Mairone was chief operating officer of the Countrywide lending division that allegedly carried out the "Hustle." She took the helm of JPMorgan Chase's involvement in the Independent Foreclosure Review this summer, according to a former Chase employee.

The review, overseen by federal banking regulators, requires the nation's biggest banks to compensate victims for harm they inflicted on borrowers. Victims can receive up to $125,000 in cash or, in some cases, get their homes back. But the review has already been marred by evidence that the banks themselves play a major role in identifying the victims of their own abuses, raising the question of whether the review is compromised by a central conflict of interest.

Mairone's role raises additional questions about the Independent Foreclosure Review.

The review "never seemed designed to place first the interests of those who were supposed to be helped u2014 victimized homeowners," said Neil Barofsky, the former federal prosecutor who served as the special inspector general for the Troubled Asset Relief Program, better known as the bank bailout.

"Finding out that the person running it for JPMorgan Chase is a person whose conduct in the run-up to financial crisis was allegedly so egregious that she somehow managed to be one of the only people actually named in a case brought by the Department of Justice goes beyond irony," he continued. "It speaks volumes to the banks' true intent and lack of concern for homeowners when addressing the harm that they caused during the foreclosure crisis."

In response to ProPublica's questions about Mairone's role in the foreclosure review and the suit's allegations, Chase issued a brief statement confirming that Mairone is a managing director who is "working on the Independent Foreclosure Review process." The statement added, "It would not be appropriate for us to discuss another firm's litigation."

Chase declined to make Mairone available for comment, and she did not return a message left at her home number.

Continue reading »

By Paul Kiel, ProPublica

Answers to homeowners' questions about the Independent Foreclosure Review.The administration's website for the foreclosure prevention program. Provides an FAQ, homeowner examples, and other tools to see whether you might qualify for the program.A list of HUD-approved housing counseling agencies nationwide.Tips for homeowners from the Federal Trade Commission.These rules lay out how mortgage servicers are supposed to conduct the program.A finance and economics blog that provides news and metrics on the state of the housing market.

Late last year, the country's bank regulators launched a massive program to evaluate millions of foreclosure cases and compensate homeowners who fell victim to the banks' flawed or illegal practices. Regulators dubbed it the "Independent Foreclosure Review" to emphasize that the banks would not be making key decisions about loans they had made or serviced.

But a raft of evidence — internal Bank of America memos and emails obtained by ProPublica, interviews with two bank staff members who have worked on the review, and little-noticed documents released late last year by a federal banking regulator — throw the independence of the review into serious doubt. Together, they indicate that Bank of America — the financial giant with the largest number of homeowners eligible for the program — is performing much of the work itself.

The ultimate decision as to whether and how much a homeowner will be compensated is not made by Bank of America, the evidence shows, but is based largely on work that the bank itself performs. One current employee called that crucial judgment "only a matter of double checking" the bank's work.

Moreover, the bank gets a chance to challenge that key decision before it becomes final — an opportunity not given to homeowners.

Bank of America strongly objects to ProPublica's analysis. It insists that the independence of the review has never been compromised. It maintains that its role "has been and remains gathering documents." While it may discover "an error" in the course of that work, the bank says that an independent review conducted by an outside firm "is the sole and final basis" for determining whether homeowners have been harmed and how much compensation they merit.

A bank spokesman questioned ProPublica's fairness, writing that "there are no facts to support your claim. Yet it seems you have made a decision to move forward with a story based on speculation and a preconceived notion of this issue."

Bank of America's regulator, the Office of the Comptroller of the Currency (OCC), also maintained that the review was independent. After seeing the internal bank documents obtained by ProPublica, the OCC investigated, officials said. The OCC concluded that the documents, which include a memo sent by Bank of America executives to the hundreds of bank employees working on the Independent Foreclosure Review, are "incomplete and inaccurate," said Deputy Comptroller for Large Bank Supervision Morris Morgan.

But the documents and interviews tell a sharply different story, and the stakes are high. The maximum cash compensation a homeowner can win through the foreclosure review is $125,000. Regulators set different amounts for the various errors and abuses homeowners endured, and those distinctions can result in widely differing payments — for instance $15,000 instead of $125,000 for homeowners who suffered very similar abuses.

ProPublica provided the internal Bank of America documents to Sen. Robert Menendez, who chaired a congressional hearing overseeing the foreclosure reviews. He said, "Congress was led to believe that the consultants would be analyzing homeowner foreclosures completely independently of the Wall Street banks, but these memos raise serious questions as to whether that's true. If banks are trying to skew the results in their favor, regulators should stop that immediately."

The senator also said that regulators "should ensure that homeowners have the same opportunities banks do to influence and contest the findings of the foreclosure reviews."

The Document Trail

Federal regulators designed the program to work like this: Each of the big banks would hire an "independent consultant" to conduct reviews of the bank's foreclosure cases. To ensure that these consultants really were independent, the regulators had to approve them. In September 2011, Bank of America hired Promontory Financial Group to be its independent consultant.

Two months later, the OCC released the contract between Bank of America and Promontory. The 118-page document received little notice, but it clearly spells out that Promontory will make its decision only after reviewing the bank's own analysis of each homeowner's claim.

When a homeowner sends in a complaint about the way Bank of America handled his or her foreclosure, the contract states, the bank "will process the complaint and provide the complaint, supporting resolution documentation, report of its findings, and proposed resolution to Promontory for independent review and decision concerning the complaint at issue." Promontory, the contract continues, will then review the "complaints and claims, together with [Bank of America's] recommended resolution and supporting documentation, and provide a decision on the complaint."

Job ads posted in the fall of 2011 for "Foreclosure File Reviewer" positions at Bank of America reflect this scope of work. Among the job duties listed in one ad were "Complete Claim Review and perform Harm Evaluation according to Promontory/OCC definitions"; "If there was financial injury, determine the amount"; and "Perform final determination of Harm." The ads were posted by staffing companies, but the bank confirmed to ProPublica it was the ultimate employer.

An internal bank document created to train employees on their role in the reviews also describes a "claim review" process at the bank. Employees would be running tests on the files to see if there was "harm done to the customer as a result of faulty servicing."

Continue reading »

Big Foreclosure Compensation, But Only for the Right Wrongs

by Paul Kiel, ProPublica Answers to homeowners' questions about the Independent Foreclosure Review.The administration's website for the foreclosure prevention program. Provides an FAQ, homeowner examples, and other tools to see whether you might qualify for the program.A list of HUD-approved housing counseling agencies nationwide.Tips for homeowners from the Federal Trade Commission.These rules lay out how mortgage servicers are supposed to conduct the program.A finance and economics blog that provides news and metrics on the state of the housing market.

Can you put a price on the damage caused by a wrongful foreclosure? Banking regulators have. And it's $125,000. Or $60,000. Or $15,000. Or2026 it's unclear.

Last November, banking regulators launched a process to force the big banks to compensate homeowners victimized by their foreclosure abuses. Many crucial details remained unclear, including how much victims might receive.

More than seven months later, regulators finally released a "framework" that shows some of the possible outcomes. It's a list of thirteen mortgage servicing "errors," each with its own associated form of compensation. In addition to fixing the bank's errors, remedies include cash payments ranging from $500 all the way up to $125,000.

It turns out that, for homeowners seeking compensation for those errors and abuses, it's crucially important just how the servicer messed up. The logic for the differences in payment isn't always apparent and in some instances seems to defy common sense.

Two homeowners who each had their bid for a modification mishandled, for instance, could emerge with either $125,000 or $15,000 depending on just where in the process the error occurred. Regulators also left unsettled how homeowners will be compensated for so-called robo-signing, the scandal that provoked the foreclosure review to begin with.

With consumer response to the review so far underwhelming, regulators also extended the deadline for homeowners to submit a claim to September 30. It was originally April 30.

Continue reading »

The video above shows the UC Berkeley protest on Nov.9, 2011 with campus police beating students back with batons.

The assistant police chief tasked with reviewing campus police actions during the November 9, 2011 protest at UC Berkeley wrote that "Some of these findings will be controversial," in his 50-page report to the UC Berkeley police chief. Critical of the administration, he found that the police should have been allowed to use pepper spray on the protesting students.

Outraged protesters are calling the report a "a tactical handbook for warfare against students."

Via:

Berkeley's Chancellor Robert Birgeneau, traveling in Asia that day, had prohibited the use of pepper spray. That ban proved prescient, as Birgeneau later noted, because UC Davis officers were captured on video weeks later using the chemical irritant to coat seated protesters, prompting outrage around the world. Reviews of UC Davis police actions are pending.

In the Berkeley report released Friday, Young said that police acted properly in every way: in removing the tents, in their preparedness, in their training. He had several recommendations, including that police prepare formations out of view of protesters, to better take them by surprise.

He lamented, however, that "force options" for police were limited on Nov. 9.

Referring to pepper spray, he wrote: "A few focused applications on the crowd that blocked the officers near the row of bushes would likely have cleared that area very quickly, with few additional baton strikes."

Perhaps because this is the campus police reviewing themselves explains the outrageous conclusion that during this absolutely peaceful protest police should have been allowed to use both pepper spray and the batons to beat students. If this is considered standard procedure on our nation's university campuses, it's a wonder that we haven't yet seen more Kent State-like situations. Is it only a matter of time?

To see the full review of UC Berkeley police actions, click here.

The following video shows the police response to the student protest at UC Davis on November 18, 2011 with pepper spray being used liberally on seated students.