Bank Bailout 2: Obama Lets Mortgage Abusers Off the Hook Leave No One Accountable [View all]

[Better Believe It]

Bank Bailout 2: Obama Lets Mortgage Abusers Off the Hook
The Obama Administration has followed a predictable pattern: Leave No One Accountable
By Common Dreams staff
February 9, 2012

After months of talks with state and federal officials, the banks have reportedly agreed to help some homeowners reduce their mortgage debt or refinance their homes at lower rates. Over 4 million familes lost their homes to foreclosure yet just 750,000 people who lost their homes to foreclosure will receive a one-time check for just $1,800 to $2,000, which for many will barely cover the cost of moving. The deal will only help a fraction of the struggling homeowners affected by the bank’s practices.

New York and California have reportedly signed off on the deal after initially holding it up in protest of lenient treatment of the banks.

The deal gives banks immunity from civil lawsuits for "robosigning," a practice whereby homeowners were rapidly evicted without proper vetting.

In his January 24th State of the Union address, President Obama promised a fresh investigation into mortgage abuses that led to the financial meltdown. Now, before that investigation has even begun, Obama is granting these 5 "too big to fail" banks immunity from "robo-signing" abuses.

http://www.commondreams.org/headline/2012/02/09-5


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The Top Twelve Reasons Why You Should Hate the Mortgage Settlement
By Yves Smith
February 9, 2012

1. We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust. It is a fraction of the cost of the legal expenses when foreclosures are challenged. It’s a great deal for the banks because no one is at any of the servicers going to jail for forgery and the banks have set the upper bound of the cost of riding roughshod over 300 years of real estate law.

2. That $26 billion is actually $5 billion of bank money and the rest is your money. The mortgage principal writedowns are guaranteed to come almost entirely from securitized loans, which means from investors, which in turn means taxpayers via Fannie and Freddie, pension funds, insurers, and 401 (k)s. Refis of performing loans also reduce income to those very same investors.

3. That $5 billion divided among the big banks wouldn’t even represent a significant quarterly hit. Freddie and Fannie putbacks to the major banks have been running at that level each quarter.

4. That $20 billion actually makes bank second liens sounder, so this deal is a stealth bailout that strengthens bank balance sheets at the expense of the broader public.

Read the other 8 reasons and full article at:

http://www.nakedcapitalism.com/2012/02/the-top-twelve-reasons-why-you-should-hate-the-mortgage-settlement.html


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Obama’s Guiding Principle: Leave No One Accountable
By: Scarecrow
February 9, 2012

The Obama Administration has followed a predictable pattern we now recognize. It has consistently functioned like criminal defense counsel, whose mission is to get their criminal clients, the major corporations and executives who fund their elections, off with no admission of guilt, no forced resignations, and as little harm to their reputation, or that of the counsel, as possible. To do this, they neutralize anyone with an ounce of public purpose in their veins.

Its role is then to convince the public that whatever you thought or feared was going on in America, and whoever you believed had caused the collapse of America’s economy, caused millions to lose their jobs, their homes and their retirements and continued to loot the country, it’s time to look forward. Because everyone who matters — and that’s not you — now agrees, they say, to function in the public interest, even though it’s a bald face lie, since nothing has changed and the looters and their complicit overseers are still in charge.

Obama’s people have performed this function for America’s looters over and over again. They did it for Wall Street, the banks, the rich tax evaders, the insurance companies, the oil companies, the gas companies, the coal companies, the CIA, the DoD, and numerous torturers and their legal/policy enablers and associated war criminals in the previous administration.

Consistent with this strategy, Obama’s team must silence, neutralize or punish anyone who protests or blows the whistle on the massive criminality and corruption involved. It must also emasculate the left and what’s left of the liberal wing of the Dem Party, using the argument that the Administration is not nearly as awful as the other Party’s people, who openly glorify looting and killing and vilifying the victims.

Read the full article at:

http://my.firedoglake.com/scarecrow/2012/02/09/obamas-guiding-principle-leave-no-one-accountable/


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Bank Bailout Day, February 9, 2012
By emptywheel
February 9, 2012

Forty-nine states, every one but Oklahoma, as well as federal regulators, will participate in a foreclosure fraud settlement that will release the five biggest banks (Wells Fargo, Citi, Ally/GMAC, JPMorgan Chase and Bank of America) and their mortgage servicing units from liability for robo-signing and other forms of servicer abuse, in exchange for $25 billion in funding for legal aid, refinancing, short sales, restitution for wrongful foreclosures and principal reduction for underwater borrowers. The announcement will be made on Thursday.

And then there’s the settlement price: $25 billion, divided up several ways. $3 billion will go toward refinancing for current borrowers who are underwater on their loans, as well as short sales. $5 billion will go as a hard cash penalty to the states, which can use them for legal aid services, foreclosure mitigation programs, and ongoing fraud investigations in other areas (one official close to the talks feared that much of that hard cash payout will go in some Republican states toward filling their budget holes). The federal government will get a cash penalty as well. Out of that $5 billion, up to 750,000 borrowers wrongfully foreclosed upon will get a $1,800-$2,000 check if they sign up for it, the equivalent of saying to them “sorry we stole your home, here’s two months rent.”

If you read DDay’s full post (or if you’ve read anything here), it’s clear that the amount of fraud was astronomical: 60% failures in one case. And if you’ve read that far, you know this is a bail out, every much as the billions gifted to banks in September 2008 was a bailout.

The Administration wants to call this a settlement.

http://www.emptywheel.net/2012/02/09/bank-bailout-day-february-9-2012/


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The banks have won, homeowners are re-victimized.
By: Cynthia Kouril
February 9, 2012

The NY Times is reporting that NY and California have agreed to sign on the 50 state deal and that is will immunize robo signing. If that is true, it’s over folks. The housing market is not going to recover any time soon and the court system will be permanently corrupted by forged and perjurious documents.

This settlement is an incredible breach of the social contract between the government and the governed.

On top of everything else, nobody seems to think it’s going to be helpful to the recovery of the housing market, help the economy, or do anything except bail out the banks, again. From the Times:

“I wouldn’t say it’s a panacea for the housing industry but it is good for the banks to get this behind them,” said Jason Goldberg, an analyst with Barclays.

Read the full article at:

http://my.firedoglake.com/cindykouril/2012/02/09/the-banks-have-won-homeowners-are-re-victimized/