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Foreclosure Process Abuse Funds Misappropriated

By January 30, 2014 No Comments

The many abuses of the Florida foreclosure process and in foreclosure litigation throughout the country have been highlighted on our foreclosure process in Florida blog many times.  We have recently discussed the 50 state settlement in regards to these foreclosure process abuses, in which servicers and banks were required to pay large sums of money to, in effect, absolve them of their faulty practices that harmed homeowners.

The problem, as always, is that when politicians get involved, anything is bound to happen.  Take, for example, the case of Attorney General Mike DeWine of Ohio.  Ohio, according to new reports, received around $330 million from servicers and banks.  Yet DeWine gave away some of that money to groups like the “Ohio Alliance of Boys and Girls Clubs” and the “Public Children Services Association.”  While these are worthy causes all, some are not convinced that money paid for abuse in the foreclosure process should be spend on completely unrelated items.

Ostensibly the banks and servicers’ bad conduct was directed at homeowners during the foreclosure process in Florida and elsewhere.  So the money they paid to remedy those practices, in our opinion, should have been directly related to the harms caused.  If it was homeowners who were harmed, then those homeowners should have been the ones receiving the money.  Of course this is an inexact science, for who is to say how much one robo-signed document is worth in terms of a dollar amount of harm caused?  Yet from our viewpoint, it seems absurd to take money in return for granting effective immunity to most banks and servicers for lying – under oath – in courts, and to take that money and treat it as general tax revenue.