Remember the landmark $25 billion federal foreclosure settlement from February? The one which has provisions to help prevent foreclosure on homeowners, provisions most states are ignoring? Which doesn’t yet seem to be doing much for foreclosure victims at all? Well, at least one person has benefited from the settlement: the whistleblower who drew the curtains back on the wizards at Countrywide Financial to kick off the case in the first place. Kyle Lagow, who was fired for pointing out illegalities in Countrywide’s foreclosure appraisal business, first brought the situation to the government’s attention with a lawsuit in 2008. That particular lawsuit, which rolled into one huge suit with a bunch of similar ones, was eventually settled for $1 billion. Whistleblower laws entitle a citizen who first brings up a case and turns over evidence to a certain percentage of the money eventually won in that case. In Lagow’s case, that amount is $14.5 million. Not bad for a lowly house appraiser.Google+
The mortgage insurer MGIC Investment Group has settled a federal lawsuit alleging that they refused to sell mortgage insurance to women on maternity leave. The suit claimed that the company required 70 women to return to work before they would sell them the insurance, which “allows homebuyers to take out loans with down payments of less than 20%”, according to the Wall Street Journal. Yesterday, the company settled for $550,000, with $511,000 to be compensation for the women and $39,000 as a civil penalty to the government. In addition, MGIC will have to train its employees on discrimination law and revamp its policies concerning customers on maternity leave. The company has also entered a preliminary settlement in a related class action suit in order to avoid spending any more money on a lawsuit they will likely lose.Google+
The US District Court judge for the District of Columbia signed off, finally, on the big $25 billion foreclosure settlement between five banks, the federal government, and most of the states. On Wednesday, Judge Rosemary Collyer approved the settlement, which was announced two months ago. The $25 billion settlement will be divvied up by the states and is suggested to be used to ease financial burden on improperly foreclosed homes and help pursue negligence in the future. However, as I’ve mentioned before, some states are going to use it for whatever they feel like. Georgia in particular is using the money to support local infrastructure, presumably telling the federal government “you can’t tell me what to do, you’re not my real dad”, slamming its door and hiding under the covers afterwards.Google+
Employees of Bear Sterns, the financial giant that was among the first failures of the subprime mortgage crisis in 2008, claimed in a lawsuit that the bank mishandled its investments (duh), causing them to lose money in an employee stock ownership plan that was part of a retirement package. Today, the Southern District Court of New York approved a $10 million settlement to be shared among thousands of employees. The number may seem big, but it’s really more of a drop in a dingy bucket, accounting for between 10-28% of their total losses in the stock. According to Reuters, more than 8,400 employees lost about $215 million in the collapse. The settlement means that the former Bear Stearns (now owned by JPMorgan, who shilled out the settlement money) will never have to answer as to whether they knew their investment plan was unsustainable and risky. If it went to court, in light of the recent $25 billion federal mortgage settlement, I’d like to think they’d have little to say in response.Google+
Last Thursday, the federal government and 49 state attorneys general announced that they have come to an agreement with five large mortgage providers over allegations concerning illegal business practices. The five banks (Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo) were accused of a lack of due diligence when creating and signing documents related to foreclosures. The $25 billion settlement, which guarantees that the case will not go to court, is the largest multistate settlement since the 1998 tobacco industry case. All states except Oklahoma participated.
It is important to note that, though this marks a major victory for those affected by the mortgage crisis, some individual claims may still be eligible to made against the companies. To find out how you or your home mortgage can benefit from this settlement, visit the settlement’s web page.Google+