Turn On The Lights, Watch The Roaches Scatter, Part 68

Looks like the banks have won Foreclosuregate, folks.

U.S. bank regulators announced pacts with the largest home lenders over allegations of shoddy foreclosure practices, jumping ahead of a states-led probe and leaving the amount of fines until later.

Under the agreements announced on Wednesday, the banks will compensate borrowers who were wrongly foreclosed upon and overhaul their mortgage operations, including undergoing an independent review of their 2009 and 2010 foreclosures.

The Office of the Comptroller of the Currency, the Federal Reserve and the Office of Thrift Supervision reached the settlements with 14 of the largest U.S. financial institutions, including Bank of America Corp, Wells Fargo & Co, JPMorgan Chase and Citigroup Inc.

"Our enforcement actions are intended to fix what is broken, identify and compensate borrowers who suffered financial harm, and ensure a fair and orderly mortgage servicing process going forward," acting OCC head John Walsh said in a statement.

Federal regulators and state attorneys general have been investigating bank mortgage practices that came to light last year, including the use of "robo-signers" to sign hundreds of unread foreclosure documents a day.
Lenders still face a probe by the state attorneys general and other federal agencies, including the U.S. Justice Department.

The partial settlement leaves in doubt the total costs facing the industry. It also fails to resolve legal uncertainty that has stalled foreclosures, keeping the recovery of the broader housing market in limbo.

Actually no, it doesn't leave in doubt the total cost.  The cost to banks will be a slap on the wrist at best, and that's if the regulators ever issue fines.  But what this does is pave the way for the state attorneys general to settle for a pittance and absolve the banks of civil penalties too, despite the notion that the banks may face severe criminal penalties.

Let's be honest here:  any settlement made with the state will guarantee the banks immunity from criminal or civil proceedings, and this set of deals opens the door to that happening much sooner now.

Mark my words, folks:  the banks are going to walk on Foreclosuregate, despite the widespread trillions in mortgage fraud they have committed and that I have documented in the Roaches series.  The odds of any meaningful penalties being applied to these criminals is now next to nil.

Count on it.  The Feds have folded, and the states will follow suit.