Posted on 02/09/2012 9:54:42 AM PST by Para-Ord.45
As reported yesterday, the cost of terminal abrogation of contractual rights in the US is, drumroll, $26 billion. Bloomberg notes:
-$26 BILLION FORECLOSURE SETTLEMENT ANNOUNCED IN WASHINGTON
-FORECLOSURE ACCORD RESOLVES 16-MONTH ROBO-SIGNING INVESTIGATION
-FORECLOSURE ACCORD IS SUBJECT TO APPROVAL BY FEDERAL JUDGE
-FORECLOSURE DEAL PRESERVES U.S., STATE RIGHTS TO OTHER CLAIMS
-FORECLOSURE ACCORD COULD CLIMB TO $40 BLN IF 14 SERVICERS JOIN
And a whole lot of corner offices for America's Attorneys General. As for what the market thinks of this "severe" settlement: BAC +1.2%, WFC +0.6%, JPM +0.4%, C -0.1%.
For those who don't understand what just happened, US banks just funded Obama's re-election campaign to the tune of $26-$40 billion.
From the NYT:
"After months of painstaking talks, government authorities and five of the nation’s biggest banks have agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners harmed by the bursting of the housing bubble, state and federal officials said. It is part of a broad national settlement aimed at halting the housing market’s downward slide and holding the banks accountable for foreclosure abuses.
Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure. The success could depend in part on how effectively the program is carried out because earlier efforts by Washington aimed at troubled borrowers helped far fewer than had been expected.
Still, the agreement is the broadest effort yet to help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders or able to refinance their homes at lower rates. Another 750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011 will receive checks for about $2,000. The aid is to be distributed over three years."
In other words, got foreclosed on for being unable to make payments? YOU GET $2,000! And that, ladies and gentlemen, is how you buy an election using taxpayer money.
I’m sure all those banking CEOs are going to take a cut in pay to fund this. What? The people who play by the rules have to pay for the people who don’t play by the rules? Who needs rules, then?
If you or I created fraudulent documents and other actions of note, we would be in jail. Welcome to the reality of two Americas.
It’s Kabuki Theater. The banks will just pass the “fines” to consumers and the government knows it.
“In other words, got foreclosed on for being unable to make payments? YOU GET $2,000! And that, ladies and gentlemen, is how you buy an election using taxpayer money.”
Destroy the economy through fraud and corruption and you get off scott free.
Yes,
Obama and his goons came up with a shakedown scheme that serves their re-election purposes and serves their “ 1% “ buddies.
Perfection.
The banks made a killing forclosing on properties because Fannie and Fredie paid the banks more than the house was worth. Without those two the bank would have had to take back the property (probably trashed) and at 1/2 of what the mortgage was. What a racket.
Jackson-like Shakedown is right. Also in the Zero Hedge article is this
Robosigning didn’t harm ANY borrower (they defaulted on their loan). Borrowers stayed in the house for up to 2 years RENT FREE. And banks have to pay $26 billion?
Regulators and Fannie/Freddie/FHA knew about these problems and did NOTHING. They could have stopped it.
I just put a contract on a foreclosure. I was wondering if I had robosign exposure. Maybe this means I’m OK. Going to be grilling the title company on this...
I know someone who has been living in their foreclosed house for over 1 1/2 years. Not paying a mortgage. They have that money to spend on other stuff. I’m sure these situations have helped prop up the economy artificially.
Smartest post here, plus the fed will loan them the money at zero interest forever, to pay this. The banks will just borrow an additional several billion at zero interest and then buy more bogus federal bonds, paying 4%, damn what a racketed. The tax payers pay it no matter how you deal it.
Thanks! There was a video on how the government is ripping us off. It had real numbers too. Did I save it? NOOOOO! LOL Probably can find it on line. Everyone should watch it.
That`s about it.
People were stupid enough to buy into the housing bubble at it`s record high and now get a bailout cheque for being and idiot.
The Govt. still refuses to let the housing market reset .
So, banks pay and turnaround to recover the funds by charging more on loans and paying less (if that’s possible) on deposits. Therefore, we all pay for whatever impact this bailout has on homeowners for face foreclosure.
We all end up paying when a settlement like this is reached, although most of us are not participants in this fiasco.
Just Geez.
What I want to know is how many folks who engaged in the frauds that were robosigning going to jail? Cause every instance of robosigning was basically a case of perjury which is a felony.
And nobody goes to jail.
I love it.
Two thieves got in a room and decided how they were going to punish each other.
Simply landmark.
“After months of painstaking talks, government authorities and five of the nation’s biggest banks have agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners harmed by the bursting of the housing bubble”
So, the “robosigning” issue is used as an excuse for a government shakedown of the banks, to extract $26 billion from them as “reparations” to the millions who “suffered from the bursting of the housing bubble (not their own greed), a bubble created by Federal reserve policies in conjunction with Federal mortgage agencies, Federal mortgage corporations and Federal housing policies (not “the banks”).
The banks would have been better off not agreeing, and forcing the Feds and the State AGs to prove exactly what homeowners were actually harmed, or actually were foreclosed on, due to the “robosigning”; a condition which the Feds and the State AGs know is likely to be a tiny fraction of all properties for which “robosigning” took place, and nothing, in terms of actual, incurred financial harm, that could likely approach more than a small fraction of $26 billion.
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