Matt Taibbi has a devastating piece on Bank of America, "Too Crooked to Fail."
This "dual tracking" scandal, in which the banks lure homeowners into defaulting in order to qualify for loan modifications, and then the banks foreclose on homeowners while in loan modification workout plans, is scurrilous and maybe even worse than last year's scandal in which the banks were caught robo-signing false documents to submit before courts in foreclosure cases.
The foreclosure fraud settlement engineered by the Obama Administration against the banks supposedly gives harsh penalities for "dual tracking," but some consumer advocates are skeptical that it will end the practice unless there is stringent enforcement.
Related: Four Whistleblowers Who Sounded the Alarm on Banks' Mortgage Shenanigans (ProPublica). Of particular interest is how Bank of America purposely disqualified homeowners for government loan programs by processing payments incorrectly so they'd be late and steered homeowners toward more expensive proprietary loan programs that were more profitable to BOA.
The banks also failed to properly administer tens of thousands of loan modifications that were working. Though homeowners made payments on time, banks lost payments, lost paperwork, or broke their agreements with homeowners and took them out of loan modifications.
Look at the myriad class action lawsuits against banks.
How many of these lawsuits will be allowed to continue given the government's settlement with the banks remains to be seen.
BOA and other mortgage servicers also charged struggling homeowners with insurance policies that cost 10 times the fair market value of homeowners' policies. This is predatory.
There really needs to be a grassroots movement to break up the big banks. Otherwise, in a decade or so, we'll face another crisis in which they're again "too big to fail."