Last week, banking executives and state attorney generals met in Washington, D.C., to discuss the foreclosure abuses that have occurred during the housing crisis. Other news stories include the debt ceiling crisis and the Congressional Budget Office report declaring the national debt will be 101% of our Gross Domestic Product by 2021. What does the looming bank settlement have to do with our national scene?
The banks are meeting to atone for their foreclosure abuses. The states, responding to complaints by thousands of homeowners, are discussing a settlement which could be as high as $20 billion. Several problems lie ahead for both the attorney generals and the bank defendants.
The banks are concerned that if they settle they might still have lawsuits filed against them. They contend it will be like having to pay twice for the same offense, and they are asking for a waiver. Some fear the temptation for the attorney generals will be to settle for the money and protect the banks from future unrelated liability. There has been a lot of discussion about how the attorney generals will prosecute the banks if a settlement fails.
The question is whether the banking abuses were civil or criminal. Civil suits would benefit homeowners, to some extent, if allowed, but criminally prosecuting the dispute with the banks might add $20 billion or more directly into state coffers, a much needed boost for financially strapped state budgets.
When our Federal Government is so strapped for cash they cannot balance the budget or pay down our national debt, it is surprising they have not already jumped into the banking settlement fray. Despite states receiving billions of dollars from the tobacco industry, it did not stop the Feds from suing the tobacco companies for violation of advertising laws.
For the homeowners involved in the abuse scandal, whether the settlement is concluded or whether they are allowed to file suits, their mortgage loans will still be due. Few homeowners will be able to escape eventual foreclosure. Filing bankruptcy will be their most viable option to either save their home or start over.
When banks defraud their customers, when states think more about coffers than their citizen’s rights, and when the Federal Government won’t take responsibility and meet their financial obligations, it is nice to know that debtors may be able to file for bankruptcy protection.
Bankruptcy laws can be complicated. If you need relief from debt and you live in or around the metropolitan area of Akron, Ohio, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.
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