Banksters Win Again
So, a "settlement" has been reached between major banks and Attorneys Generals of 49 states over charges of outright fraud in illegal foreclosures.
For having fabricated millions of purportedly legal documents to support foreclosing on millions of mortgage loans in America (a criminal act; something you or I would be indicted for and arrested in a heartbeat), and no one responsible goes to jail. The banks will collectively pay $25 Billion dollars. The total of all mortgages in the United States either in forclosure, delinquent, or whose owners are 'underwater', is estimated to be $700 Billion.
The bulk of the settlement, about $20 billion, would go to one million American homeowners [wrote Nelson Schwartz and Julie Creswell in the NYT] who would have their mortgage debts reduced or their loans refinanced at a lower interest rate. It also includes $1.5 billion for roughly 750,000 people who lost their homes to foreclosure between 2008 and 2011, with each receiving between $1,500 and $2,000.And, the media is putting a positive spin on developments: Homeowners benefit! Well, some of them do; yeah! People are helped! Justice is served, kinda!
- The New York Times headline was, "Homeowners Get Bulk of the Benefits From Mortgage Plan (...Under the settlement, nearly two million Americans could benefit from mortgage relief from the nation’s biggest banks").
- The Los Angeles Times headline was, "Foreclosure deal to help 2 million with loan trouble (... The nation's five largest lenders will pay $25 billion to partially compensate those who lost their homes)".
- The Guardian UK wrote that "Obama Praises $25b Mortgage Deal (... Millions of people could have mortgage debt cut as America's top lenders agree deal over alleged abuses in housing market)".
“The effect of this settlement will be catalytic,” Shaun Donovan, the secretary of Housing and Urban Development, said in an interview.So, let's recap -- approximately one million homeowners will receive some relief through restructuring in their mortgages. Approximately 11 million households need their loans modified in order to keep from being forced out of their homes.
He predicted it would spur more loan modifications through existing government programs as well as principal reductions — when loan debt is written down for borrowers who owe more than their home is worth — as well as additional mortgage relief provided by banks.
Approximately 750,000 people who were evicted, lost their property and in some cases hundreds of thousands of dollars; marriages, and jobs, could receive monetary compensation in the amount of ... between $1,500 and $2,000.
Fortunately, they don't waive any rights to file future legal action against their former mortgage lenders if they demand that two grand -- but is the compensation more than a token? Is it just? Or, an insult? It reminds me of the "compensation" offered by Austrian courts to the families of Holocaust survivors attempting to reclaim their lost art.
The banks, which were facing the possibility of criminal investigations and civil actions in at least 25 states, including California and New York -- will effectively not be further prosecuted by the Attorneys General of 49 states (Oklahoma would not join in) for their actions. They could be investigated and prosecuted for violations of Federal law... but what is the chance of that happening?
And, as HUD Secretary Donovan said to the NYT, the "settlement" would move the major banks to 'act better', provide further loan modifications and reductions in principal for affected Americans (the 11 million other mortgageholders facing foreclosure not assisted by this "settlement"). And the banks would do this, because they're just nice guys.
Remember? The Bush and Obama administrations gave them hundreds of billions of dollars. The expectation was that the money would spur the Nice Guys to lend money to small businesses, prime the pump to get the economy moving. The banks took the money, kept it, and used it (among other things) to provide themselves huge bonuses for their executives and board members. Why would they behave differently, give the
The banks precipitated a gigantic, global financial crisis -- which is far from being over. They forced millions of Americans from their homes, illegally. They disrupted and even destroyed lives. And unless the States' Attorneys General or the Department Of Justice go after them in force, the banks are effectively getting a Mulligan.
They walk, by ponying up a relatively small amount of cash -- which will simply become a tax write-off as a business expense. I understand that the "settlement"'s cheerleaders tout this as a first step, a move in the direction toward reforming the financial industry. But as one critic noted, the total is a "drop in the bucket". It smells like a band-aid for a dysfunctional system that still rules.
The amounts from individual banks were linked to their share of the servicing market. The biggest, Bank of America, would provide $11.8 billion, followed by $5.4 billion from Wells Fargo, $5.3 billion from JPMorgan Chase, $2.2 billion from Citigroup and $310 million from Ally. Bank of America would contribute an additional $1 billion for Federal Housing Administration loans.Ha Ha Ha Ha. Why not just say it? They won. Again. I'm not surprised at all.
And if nine other major mortgage servicers join the pact, a possibility that is now under discussion with the government, the total package could rise to $30 billion.
Banks stocks were mixed in trading Thursday, but shares of Bank of America rose 0.62 percent to $8.18, its highest level since September. Much of the money to pay for the settlement has already been reserved, and investors expect the settlement to remove at least one legal worry for Bank of America.
MEHR Mit Schweineri: The
And, Avedon Carol weighs in from a different vantage point in the UK, courtesy of The Great Curmudgeon (paragraphing added for emphasis):
For a moment it seemed like there was good news when I saw this: "Schneiderman's Last-Minute Cancellation Spells Trouble for Foreclosure Fraud Settlement."Avedon has more. Follow the links. Now.
But then it seemed it was more like this: "49-State Foreclosure Fraud Settlement Will Be Finalized Thursday."
(And Jesus Christ, Ezra [Klein], why on earth is it good news that this deal will "help a lot in protecting banks from lawsuits"? These people stole people's homes, and you think a check for a couple of grand is some kind of compensation?
(If you get caught selling a lid of grass they confiscate every damn thing you have, but if you steal someone's house you just pay pocket change in compensation out of billions you made from cheating people? That's really nice for you - if you're a banker.
(But, you know, we don't need bankers like that! And we need to put those banksters in jail so they won't do it again - and doing more of it seems to be just what they have in mind, thanks to this deal.)