Dan Fisher, Forbes' legal reporter, doesn't break a lot of new ground in his take-down today of the "mortgage fraud" settlement announced yesterday but he does repeat a central fact of the story that can't be repeated often enough:
The outcome shouldn’t come as a surprise. After I wrote a piece critical of the parallel mortgage settlement with state attorneys general last year,comparing it to the deeply flawed tobacco settlement, I was barraged with comments from critics accusing me of downplaying foreclosure fraud. I responded with one simple question: Has there been a single case in the past five years of a homeowner who was current on his mortgage being foreclosed through fraud?
The answer was silence, he reports. Banks don't want to own foreclosed properties, they lose money on them. What people getting checks from the banks today are getting is the equivalent of drawing the "bank error in your favor" card in Monopoly - and come to think of it the checks are for about $200.
Sure, the banks broke paperwork rules but at the end of the day, nobody who was actually paying his or her mortgage was harmed. And the people who weren't, well, if you borrow money and you don't pay it back, shouldn't you expect something bad to happen?