This is indeed a sad day today when Obama Administration announced
a $20 billion settlement in the bank foreclosure fraud crimes. Banks that
causes over $700 billion dollars in real estate damages, trillions of dollars in
world wide economic damages and brought homelessness and suffering to millions
of people will walk away with miniscule $5 billion dollar payment. The biggest crimes
of the centuries were not investigated nor prosecuted and corrupt bankers were
not punished. This is another bailout to bankers, the crooks, by Obama,
betrayal of American public and mockery of American justice system.
Here are some of the REACTIONS on Obama’s foreclosure fraud giveaway:
But I’m thinking of declaring this Bank Bailout Day, a
holiday of the stature of President’s day…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. - Marcy Wheeler, Emptywheel
I think you can divine what I think of the
foreclosure
fraud settlement, which releases liability on a host of fraudulent conduct
for only a $5 billion guarantee from the banks, as well as $20 billion made up
mostly of “credits” that HUD believes will translate into around $34.5 billion
overall. The credits play out over three years, so you can adjust for
inflation, and in fact if you adjust in that way, as Matt Yglesias does, you
find that this is around 10 times less than the tobacco settlement of the late
1990s. And needless to say, it’s a drop
in the bucket compared to the negative equity in the country which stands at
around $700 billion. The $2,000 for foreclosed borrowers represents the bare
minimum homeowners would expect to receive. - David Dayen
Wells Fargo, Citi, Ally/GMAC, JPMorgan Chase and Bank of
America just sealed a deal with 49 State Attorneys General that will release
them from liability for out-right defrauding millions of homeowners. In
exchange, families defrauded by the banks can apply for what amounts
to 2 months rent ($1,800-$2,000) compensation for losing their homes. - Jane
Hamsher
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. – NY Times
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. – Cynthia kouril
“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. –NY Times
About one in five Americans with mortgages are underwater, which means they
owe more than their home is worth. Collectively, their negative equity is
almost $700 billion. On average, these homeowners are underwater by $50,000
each. – NY Times
On the other hand, the banks are evidently bribing the AG’s with money to
use to pay for their investigations of—the banks. And useless consumer credit
education, to perpetuate the myth that this is the fault of greedy or stupid
homeowners who bought more house then they could afford; rather than the
reality that they were fraud victims of predatory lenders. – Cynthia Kouril
“I just don’t think it’s going to be
a life-changing event for borrowers,” said Gus Altuzarra, whose company, the
Vertical Capital Markets Group, buys loans from banks at a discount. - –NY
Times
“It may be good for individual homeowners, but if you don’t do something to
help the foreclosure process, it’s not going to help the housing market,” –NY Times
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. –
Yves Smith, Naked Capitalism
Obama’s operatives have doggedly pressed for a settlement
that would effectively give banks immunity from prosecution. Instead, home
owners would be “compensated” from a paltry fund of no more than $25 billion –
a drop in the bucket, considering the trillions in housing values that
disappeared into illegally securitized air in the catastrophe, and much of the
money might not even come out of the bankers’ own accounts. He has also opined
that most of what the bankers did was “not illegal.” Every action he has taken
as president has been to protect the innocents on Wall Street. -
Glen Ford, BlackAgendaReport.com
First it screws over homeowners by immunizing robo-signing
from criminal prosecution or large scale civil suit. The robo-signing is the
smoking gun that is the key to proving every other part of this criminal
conspiracy, which is why the banks had to have robo-singing immunized. So,
homeowners are screwed.
Yet that is not the end of the harm that this deal does to
the public. The principal write downs in question are not being funded by the
banks. No, they will be funded out from under the bond holders. The bonds held
by pension funds, municipalities, hedge funds, and even in the portfolios of
individual investors. Yep, John Q. Public is raped at both ends of this deal. This
is the worst of outcomes. You will lose your house and then see your retirement
gutted. And the courts will have been permanently corrupted. - Cynthia Kouril
We are especially disappointed in the “Justice Democrats” —
particularly Attorney Generals Eric Schneiderman and Kamala Harris — whose
complicity proves that any faith in their moral fiber or independence was
misplaced. When Timothy Geither and the Obama White House pressed them to fold,
they did so. At a time when America needs leaders to fight for justice
and accountability, they chose to advance their own careers by protecting the
corporations and bankers of the oligarch class — hoping that a few press releases
filled with platitudes echoed through an expensive propaganda machine will fool
a credulous public. It won’t. -
Jane Hamsher
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. 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 - Scarecrow
Not only did Wall Street settle its robo-signing, illegal
foreclosures and servicing problems with the Department of Justice and 49 state
attorneys general (Oklahoma settled independently) but lost in the
headlines was that the two major regulators of national banks, the Office of
the Comptroller of the Currency (OCC) and the Federal Reserve, also settled
with the biggest Wall Street banks in a decidedly cozy deal that effectively
lets them off without a monetary fine as long as they pay under the federal-state
settlement agreement. There’s also
something peculiar about the Federal Department of Justice and 49 states
setting up an informational web site that ends in .com instead of .gov.
Register.com shows the web site has used a privacy shield to block the name of
the owner of the site. - Pam Martens
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References:
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