A new bailout of the banks?

[kentuck]

Why not just let the bank sell their mortgages to Fannie/Freddie like they did before? Why pretend they are doing anything differently? Sounds like another slick deal for the banks by Timmy, in my opinion.
============
<snip>
WASHINGTON -- The Obama administration is introducing a new program on Monday designed to lower monthly mortgage payments for more troubled homeowners.

But a key new condition in the plan would shift the financial liability for refinanced loans from Wall Street banks to the American taxpayer. And by focusing on lower payments, the program does not confront what housing experts view as the core problem in the foreclosure crisis -- borrower debt that exceeds the value of one's home.

<snip>
The newly expanded program would expunge legal liabilities associated with mortgages refinanced through the program for the original lenders of the mortgages. Each time a bank sent a loan to Fannie and Freddie, it certified that the loan met Fannie and Freddie's safe lending criteria. But many loans sent to the mortgage giants did not, in fact, meet those criteria. Currently, when borrowers default on those ineligible loans, the mortgage giants can "put back" the resulting losses onto the banks that pushed the loans.

<snip>
If borrowers go through HARP, but decide after several months that the modest monthly savings do not outweigh owing tens of thousands of dollars more than their home is worth, taxpayer-owned Fannie and Freddie will have to take the full loss. Even if the original loan was sent to Fannie and Freddie with false or fraudulent guarantees from the bank -- promises that may directly be tied to the borrower's current financial problems -- banks will be immune from liability. Fannie and Freddie plan to charge banks "a modest fee" to extinguish this liability, but the administration has yet to determine what that fee will be.

http://www.huffingtonpost.com/2011/10/24/foreclosure-plan-obama-harp-refinancing_n_1028554.html

[Why Syzygy]

1. ~SIGH~ nt

[Hell Hath No Fury]

2. Fer fuck's sake -

:banghead:

[CoffeeCat]

3. Soooooo....

"The newly expanded program would expunge legal liabilities associated with mortgages refinanced through the program for the original lenders of the mortgages."

There are so many mortgages that have been swapped and rolled into derivatives--and moved from
bank to bank to bank. We've heard the countless stories about banks being unable to produce
the original titles on homes. Therefore, the homes can't legally be foreclosed upon, because
no one knows who has the original note.

Homeowners are only beginning to wake up to using this situation to stay in their homes--and
the OWS movement will only embolded citizen-powered moves like this.

Question: Is this a way to clean up this horrid mess, created by these banksters?

Another question: Are the powers that be anticipating a gigantic wave of foreclosures--and
are they attempting to prevent homeowners from playing the "produce the note" card when
banks attempt to foreclose on them?

I guess I'm skeptical, in this day and age--when the banks pretty much call the shots.

It should also be noted that the banks spent YEARS making trillions off of the countless
mortgages they sold and then packaged into mortgage-backed securities that were traded
on the secondary market. Quite the game they had going for years--which was totally
dependent on unprecedented numbers of mortgages being sold. So...they've made their
trillions. Now, because of their constant shell game--these banks have lost the paper
trail on many homes and cannot produce the notes.

I don't see a lot of overwhelming help for mortgage owners in this "program", but I do
see BIG, BIG benefits for banks--that will be able to literally get a "do over"--making
all of their swapping and irresponsibility a moot point. Slate is wiped clean for them.

Is this what this program is *really* about?

[Autumn]

8. Oh shit, I think you are on to something there.

Great post.

[Autumn]

4. Well how bout that.

any other way he can think of to give to the banks the check I write them every April? Maybe I can just make out the check to them. Eliminate the "middle man" so to speak. Yeah its all snark.I know it doesn't all go to them, but I really object to this. What a bunch of fucking bullshit.

[TBF]

9. No, you'll have to split your check between the Bank of America and the Dept. of Defense -

may as well sign over all future Social Security checks to them as well.

:banghead:

[dixiegrrrrl]

5. Oh goody whompers...more "change" I was not hoping for.

[CoffeeCat]

11. It's getting ridiculous isn't it?

Seriously. I want to stand in front of the White House and scream, "REALLY?"

Of course, the media is helping the White House position this as some big
giveaway to the homeowner.

This is a giveaway to the banks. OMFG...I can't even believe this is happening
in our country!

Buried in these articles about this terrific (cough, cough) "program" are details
about how the banks get a windfall. If any bank sold a loan to Fannie and Freddie--
and lied about that loan meeting Fannie/Freddie standards--those banks are now relieved
of any legal liability associated with those loans.

Ok, banks misrepresented loans on a daily basis. This is what they did for years! They
sold mortgages, packaged them into mortgage-backed securities and made a killing. So
many of those securities had bad loans--AND THE BANKS KNEW THEY WERE BAD LOANS
THAT DIDN'T MEET FANNIE/FREDDIE STANDARDS.

So, this "program" relieves banks from HARSH FEES and ALL LEGAL LIABILITIES associated
with defrauding customers and Fannie/Freddie.

This is a FREE PASS and an early Christmas gift to the banks.

I'm guessing the banksters said, "Ok, here's what we want. We want a way that we can be
released from any financial or legal penalties for the fraudulent loans that we schlepped.
We want out. Do what you have to do."

So--the White House gives the banks their little present--and throws in a tiny bone for
the consumers.

So now, if homeowners are underwater on their loans--their payments are reduced.
NOTICE THAT THE TOTAL AMOUNT OF THE LOAN ISN'T DECREASED. The homeowner is still screwed--
owning a home that is worth $200,000--when he owes $240,000 on it. So now, when I'm unemployed
and without health insurance and about to lose my home--I can enroll in a "program" that
enables me to pay $1,000 monthly instead of $1,700--on a home that is worth much less than
I owe.

Wow! What a deal! :sarcasm: It's a deal for the banks--with a piece of stale bread
thrown in for the consumer--and repackaged as a steak dinner for the consumer.

Boy...us 'murkins must have looked realllly stupid and gullible on that ol' 2008 campaign
trail!! Wowee! The nonsense they try to sell us really is pathetic!

[dixiegrrrrl]

13. On a postive note...( not pun intended) it IS more food for OWS!

[michnied123]

6. 16 trillion in secret bailouts

Sen. Sanders amended the financial reform act so that a partial audit of the Fed would take place. Turns out there was 16 trillion is secret bailouts to the usual suspects + some foreign banks. hasn't been much talk of it in the press.

[RC]

7. When are "We the people..." going to get bailed out?

Hey gang, what is wrong with this sentence?


"Even if the original loan was sent to Fannie and Freddie with false or fraudulent guarantees from the bank -- promises that may directly be tied to the borrower's current financial problems --

banks will be immune from liability.

"

[AsherWI]

10. Yikes!

I sure hope not!!

[chill_wind]

12. Dean Baker

Dean Baker, co-director of the Center for Economic Policy Research, says it’s “hard to see amounting to much.” He assumes the revamped program to help closer to 500,000 homeowners over the next couple years. “That’s something, but if we assume an average saving of $4,000 each, this gets us $2 billion in money freed up. Also, in many cases these people would be better off walking away.”

Every little bit helps, says Baker, but much this programs offers less than is necessary to move the needle on unemployment or stabilize the housing market.

The White House’s liberal critics argue that the administration could do more — a broader refinancing program, one that creates greater incentives for lenders and borrowers, and perhaps one that actually reduces homeowner’s principal, to bring them back above water. Bolder steps may be on the horizon. White House spokesman Jay Carney told reporters Monday to expect further executive action by President Obama in the weeks ahead.

TPM:

Brian Beutler October 24, 2011, 3:49 PM

http://tpmdc.talkingpointsmemo.com/2011/10/economists-white-house-mortgage-plan-is-a-good-but-modest-plan.php?ref=fpb

[CoffeeCat]

14. How about this program...WALK AWAY EN MASSE

The banks bought off our politicians, and then the politicians relaxed
lending standards. The banks were then free to give a mortgage to anyone
with two neurons. The banks needed all of those mortgages, so the real
money making could begin.

The banks packaged those mortgages (some of them worthless, and they knew it)
into mortgage-backed securities that were sold to other banks.

They all swapped crapola from each other and made trillions.

This was their scam. They used the American people to fuel a scam.

There's nothing wrong with walking away. If it benefits your family and
you feel you have no other choice--it is not wrong to walk away from a
huge scam that was concocted by the banks, enabled by our corrupt politicians
and played out for years. A big joke on all of us--with our lives destroyed
and the banks enriched beyond their wildest dreams.

Why in the hell should any of us feel guilty about walking away from a huge scam,
in which we were used like objects?