Ballyhoo for global mortgage pact was premature

Steven Miller

Recall the fanfare last week when a $25 billion “national mortgage-servicing settlement” was announced?

President Obama, U.S. Attorney General Eric Holder, Nevada Attorney General Catherine Cortez Masto and 49 other state attorneys general hastened to microphones and issued a flurry of press releases.

They hailed as historic their state and federal governments’ “settlement” with the country’s five biggest mortgage servicers — Bank of America, Citi, Wells Fargo, JPMorgan Chase and Ally/GMAC.

It now turns out, however, that no final settlement actually yet exists.

Even today — the better part of a week after all the lawyer-politicians paraded before national microphones — the website created to ballyhoo the deal still lacks its core element, the so-called “National Mortgage Settlement” itself.

Instead, merely informs visitors that the “National Mortgage Settlement” document is — in parentheses — “coming soon.”

But even that appearance, any time soon, seems unlikely. According to the U.S. Department of Justice, the actual legally binding and essential terms of the settlement won’t be made public until they are submitted for approval by a federal court — which itself must then determine if the deal passes legal muster. 

Although the website yesterday linked to an “executive summary” signed by a North Carolina assistant attorney general — and posted on a Washington State attorney general website — the final, legally binding terms of the pact are still clearly in flux.

Statements by two of the largest mortgage servicers named in the “settlement” — Citi and Bank of America — make that clear.

Citi, in a statement, emphasized several times that the so-called settlement is an agreement in principle only:

The announcement today reflects an agreement in principle only. Accordingly, the final terms and provisions of the agreement are subject to further documentation and approval of Citi’s Board of Directors as well as final court approval.

Bank of America, also in its news release, carefully and repeatedly referred to the pact settlement as “agreements in principle”:

Bank of America Corporation today confirmed it has joined the other four largest mortgage servicers in agreeing in principle to the terms of a global settlement resolving federal and state investigations into certain origination, servicing and foreclosure practices …

Under the agreements in principle, Bank of America expects to develop new or enhanced programs to provide borrower assistance and refinancing assistance, to make direct payments to state and federal governments and borrower restitution, and to agree to national servicing standards. The agreements in principle are subject to ongoing discussions among the parties and completion and execution of definitive documentation, as well as required regulatory and court approvals. (Emphasis added.)

No comparable statements could be found on the Web from Ally/GMAC, JPMorgan Chase or Wells Fargo.

“You know it’s bad when the banks are the most truthful guys in the room,” wrote Yves Smith of the respected and highly popular Naked Capitalism blog. Smith — pen name of a longtime analyst at major financial firms, including Goldman Sachs and McKinsey & Company — observed the bank “had to be more precise than politicians because it is subject to SEC regulations about the accuracy of its disclosures.”

American Banker also reported that multiple sources raised doubts that any agreement is yet in place on actual binding details.

One person familiar with the actual mortgage-servicing pact negotiations told the publication that “A settlement term sheet” — which would spell out the binding legal terms of a final settlement — “does not yet exist.”

American Banker also reported that some of its sources were telling it “that the political pressure to announce the settlement drove the timing, in effect putting the press release cart in front of the settlement horse.”

Significant behind-the-scenes disarray also surrounds the National Mortgage Settlement website.  U.S. Attorney General Holder, in a speech Thursday, said it was “a new website that we’ve established,” but individuals clicking on the DOJ’s provided link received the following warning:

The Department of Justice does not endorse the organizations or views represented by this site and takes no responsibility for, and exercises no control over, the accuracy, accessibility, copyright or trademark compliance or legality of the material contained on this site.

As of today, the warning had been removed from the link provided by the DOJ.

Also, new today was a change in the front-page design of, so that the “National Mortgage Settlement” graphic in the upper-right corner of the front and other pages now largely obscures the wording that promises the actual National Mortgage Settlement document is “(coming soon).”

A check of the Who-Is web-domain information, which reports the owners and registrants of web domains, reveals that the registrants had paid extra to Moniker Privacy Services to conceal their identities and contact information from the public.

The firm,, advertises that, without its privacy protection services, “your contact information remains completely transparent and accessible to everyone on the web. Those records could include your name, address, phone number and e-mail address. Without WHOIS privacy protection, competitors, spammers and other prying eyes could be collecting this information without your permission. But you can stop them, with Moniker’s Domain WHOIS Privacy.”

Currently, owners and registrants of remain unknown.

Update (3/12/12):  The terms of the National Mortgage Settlement were released today.  You can read more about it here.

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Steven Miller

Senior Vice President, Nevada Journal Managing Editor

Steven Miller is Nevada Journal Managing Editor, Emeritus, and has been with the Institute since 1997.

Steven graduated cum laude with a B.A. in Philosophy from Claremont Men’s College (now Claremont McKenna). Before joining NPRI, Steven worked as a news reporter in California and Nevada, and a political cartoonist in Nevada, Hawaii and North Carolina. For 10 years he ran a successful commercial illustration studio in New York City, then for five years worked at First Boston Credit Suisse in New York as a technical analyst. After returning to Nevada in 1991, Steven worked as an investigative reporter before joining NPRI.

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