Goldman Sachs: Fraud and Incompetence Go Hand-in-Hand

Not only did Goldman Sachs commit fraud through mass sales of toxic MBSs for which they paid a small fine, but Goldman also began a foreclosure review with a so-called arm's-length consulting firm in order to establish what harm was done to victims of foreclosures.  When the review process to determine who was harmed and how they were harmed became too costly and  too lengthy, the process was stopped and Goldman accepted a settlement to pay out some dribs and drabs of money through Rust Consulting who appear to be totally incompetent.

So much incompetence; so much ineffectual regulatory oversight.

Banks do harm to homeowners through illegal foreclosures; banks begin reviews to see what harms they have done; reviews are discontinued because they take too long; and finally money is thrown at the homeowners for harm that is not explained.

Done deal!

More Foreclosure Settlement Fiascoes:  Rust Consulting Underpays Some Harmed Borrowers
By Yves Smith - Naked Capitalism
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The latest blunder: Rust sent out checks that were too small to some eligible borrowers. The Fed put out a press release with the not-exactly-forthcoming headline “Federal Reserve provides additional information on borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley” (Deontos):

Some borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley and who were already sent a check as part of the Independent Foreclosure Review payment agreement will be sent an additional payment around May 17, Rust Consulting announced Wednesday . The payments are being made to correct an error by Rust Consulting, the paying agent, when the original payments were sent last week.

As Rust Consulting has announced, approximately 96,000 borrowers whose loans were serviced by the former subsidiaries of Goldman Sachs (Litton Loan Servicing LP) and Morgan Stanley (Saxon Mortgage Services, Inc.) were sent checks for less than the payment amount that the Federal Reserve directed Rust to pay. The new checks will make up the difference between what was in the original check sent by Rust and what should have been paid. Borrowers should cash both the original checks and the supplemental checks.

The notice indicates that the 96,000 affected borrowers were out of a total of 217,000 who were set to receive payment from the two servicers.

Read the whole article here