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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 not sure that's the whole story. The homeowners who were really screwed... people whose homes were foreclosed when they were in the service, or people whose homes were foreclosed when ownership of the mortgage was unclear, on the basis of forged documents... are now unable to recover. The banks have settled with the government, who gives a dole out. The payout will mostly go to people who don't deserve it; the banks' liability is capped; and the few people who were really shafted might not be able to recover. What happens to the foreclosure mills? Do any of them go to jail?
“I’m not sure that’s the whole story. The homeowners who were really screwed... people whose homes were foreclosed when they were in the service, or people whose homes were foreclosed when ownership of the mortgage was unclear, on the basis of forged documents... are now unable to recover.”
The incidence of foreclosures on members of our military services was not either systemic or widespread (did not happen inapprpriately everywhere, all the time); and it was not always a legal error - banks/mortgage holders not following state/federal regulations regarding mortgages given to active service members, as much as it might have been a “moral” issue - were banks “morally” obliged to adopt special standards related to the mortgages of active duty service men and women, before executing a foreclosure.
As I said in my first post, the evidence for widespread enactment of foreclosures “when ownership of the mortgage was unclear” due to “robosigning” is very weak, and yet “robosigning” is the dominant legal excuse for the shakedown of the banks.
They are using the excuse of the type of errors involved with robosigning, without being able to identify the extent to which that issue and foreclosures intersected, came together (the evidence for which is weak) to extract sums of money from the banks to help all kinds of people simply because they were foreclosed on.
Its a legal scam and a government shakedown, regardless of whatever errors there were in mortgage records due to “robosigning”. Proof of a widespread intersection of “robosigning” and “foreclosures” is in fact NOT in evidence, yet, on the basis of “robosigning” the banks are told to pay money ($26 b) that the government will use for reparations for “foreclosure” problems. Its just as one could expect from the Chicago mafia.
“The payout will mostly go to people who don’t deserve it; the banks’ liability is capped;”
No it is not. They can still be sued on the same claims in civil court by individuals.
this is a BS settlement.
Fake documents kicked people out of their homes.
Banks were able to ignore and circumvent the law.
and what does the poor homeowner recieve?
2,000 that it.
This settlement is PENUTS.
this is a huge payoff by and to politicians.
if MERS is anywhere along the title path, then it is 100% certain.
Indemnity and guarantee clauses from the banks are worthless. (Ask those with washington mutual guarantees, greentree etc.)
If that is in fact correct, thank you for pointing it out. It changes a lot--the banks can't be sued anymore by the AGs, above and beyond the amount that is being wpecifically extorted in the settlement and being passed around. That makes it an election time bribe, because the money will go to people who don't necessarily deserve it. I'm glad to hear you think that individuals who have been defrauded can still sue for damages; I'm saddened that the government has piled on and named a capped price.
“I’m glad to hear you think that individuals who have been defrauded can still sue for damages; I’m saddened that the government has piled on and named a capped price.”
People who sue, individually, on a claim that their mortgage was foreclosed on and that they were defrauded, will have to prove more than some incidence of mortgage &/or title documentary mistakes were made, even as possibly due to “robosigning”, they will also have to show that without that issue they would not have been foreclosed on anyway. So far, their is very little evidence that there are such individuals.
The only “capping” is with regard to an amount/amounts settling the gubernut’s claims vis-a-vis irregulatories that contravened state and/or federal financial regulations. There is no “capping” relative to additional claims by individuals OR by any states that did not/do not sign on to the settlement agreement. That leaves a lot of room for further shakedowns by the tort lawyers fraternities.
Unfortunately, while our court system does provide for “friendly” “out of court” settlement agreements, it does not, unlike the U.K., require the loser to pay the winner’s legal fees if the case goes to trial. A vast number of suits in this country are settled “out of court”, even after the trial begins, not because the trial concluded the matter of guilt, but because the plaintiff, often the government, is committed to making any trial so costly for the defendent that a “settlement” is simply cheaper.
We get results where the defended is neither found guilty nor admits guilt, but will be tagged in public as guilty simply because of the charges and that they paid something in a settlement. It is not a system of “justice”; it is a system of public financed extortion.
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