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E. Scott Reckard
Los Angeles Times

Since the mortgage meltdown, the Federal Deposit Insurance Corp. has opted to strike deals with banks rather than sue — and promised not to tell.

Three years ago, the agency collected $54 million from Deutsche Bank in a settlement over unsound loans that contributed to a spectacular California bank failure.

The deal might have made big headlines, given that the bad loans contributed to the largest payout in FDIC history, $13 billion.

But the government cut a deal with the bank’s lawyers to keep it quiet: a “no news release” clause that required the FDIC never to mention the deal “except in response to a specific inquiry.” read more »

 

A newly streamlined government plan to reward homeowners who diligently pay their underwater mortgages is proving a bonanza for banks, which by one estimate may pocket $12 billion in extra revenue by refinancing loans.

The revisions to the Obama administration’s 3-year-old Home Affordable Refinance Program have yielded mixed results for homeowners, analysts and mortgage professionals say.

Some responsible homeowners are indeed getting lower-interest loans despite owing far more than their homes are worth. But others have loans that don’t qualify, or must jump through hoops the plan was supposed to eliminate, such as on-site appraisals and extensive paperwork. read more »

 
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