A short diary on some astonishing news - American Banker reports that:
More than a day after the announcement of a mammoth national mortgage servicing settlement, the actual terms of the deal still aren't public. The website created for the national settlement lists the document as "coming soon."
That's because a fully authorized, legally binding deal has not been inked yet.
Hmmm ... the necessary document doesn't exist. Doesn't that sound familiar ... and how appropriate for mortgage fraud.
American Banker asked The Department of Justice, the Department of Housing and Urban Development, and the offices of Attorneys General in Iowa, North Carolina and Colorado for a copy of the settlement last night. Only Iowa, North Carolina and the Department of Justice have responded, saying that the document would not be available until it is filed with the court on a yet-undetermined date.
This is remarkable given all the back and forth there has already been about this thing. No one knows for sure what's in it. And yeah, that makes it hard to evaluate:
Quite simply, the actual terms of a settlement matter.
"The devil's in the details," says Ron Glancz, chairman of law firm Venable LLP's Financial Services Group. "Until you see the document you're never quite sure what your rights are."
David Dayen (who is doing a great job on this) is
non-plussed:
This is incredible. The Administration, the AGs, everyone involved in this made a big show of an agreement reached on foreclosure fraud. But there is no piece of paper with the agreement on it. There’s no term sheet. There are just agreements in principle.
There’s a HUGE difference between an agreement in principle and the actual terms. I mean night and day. The Dodd-Frank bill was for all intents and purposes an agreement in principle. It left to the federal regulators to write hundreds of rules. And we have seen how that process of implementation has faltered on several key points. But the Administration wanted to announce a “big deal,” the details be damned. And they got buy-in from the AGs. Everyone else stayed silent.
It's almost comical how much has been written here
and elsewhere about this thing and yet we still don't know what it is. No wonder it's hard to understand. And I have to say the "announce it and get the details later" approach doesn't inspire confidence. If they had all the details worked out they would have a document. If they don't, they shouldn't have made an announcement.
Sat Feb 11, 2012 at 7:43 AM PT: Yves Smith opines that the actual details are kept out of the public eye in order to lessen possibility of objection from investors.
Why would they choose to delay publicizing such important information? The most logical reason is they want it to be public the bare minimum amount of time possible prior to court approval, so as to give opponents (read aggrieved investors) the tightest window possible for filing motions opposing the pact. This deal was done within a very small group, and the two parties most affected, homeowners and investors, were and continue to be kept as far away from the process as possible.
(thanks to 2laneIA!)