Author Topic: Banks Win: States Agree to Settlement  (Read 1827 times)

Antonio

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Banks Win: States Agree to Settlement
« on: February 09, 2012, 01:21:02 pm »
+3
In my opinion the reason the banks pushed so hard for this settlement is the same reason they push for settlements every time they are sued. Basically, they make way more off the fraud than the settlement costs them, so its basically just seen as "the cost of doing business".

For a while AG's in a few states where holding out but this NY Times article seems to indicate they finally reached an agreement the banks will sign on to. They made untold amounts off the fraud, crashed the economy to the tune of trillions in worth lost, and their bill? 26 Billion (which Yves points out is really only 5 billion from the banks, see link below)

I am glad some people will get some aid but when one of the examples of such compensation is the following, it gives you an idea of how pathetic this deal is:

Quote
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.

Wow 2,000. We cheated you out of your home but here is a tiny portion of what we scammed you for. Your welcome! And we have constantly heard promises of refinancing through HAMP and other BS and it never helps the numbers it purports too.

Here is the NY Times article: http://www.nytimes.com/2012/02/09/business/states-negotiate-25-billion-deal-for-homeowners.html?pagewanted=1&_r=3&nl=todaysheadlines&emc=tha2

And here is Yves Smith from Naked Capitalism with 12 reasons to hate this deal: http://www.nakedcapitalism.com/2012/02/the-top-twelve-reasons-why-you-should-hate-the-mortgage-settlement.html

Quote
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.
Not always have we mistaken mimicry for mastery, or pretending for knowing, or enslavement for freedom - Sunni Patterson

There are no such things as persistently failing policies. - Robert Higgs

Margaret

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Re: Banks Win: States Agree to Settlement
« Reply #1 on: February 09, 2012, 01:33:39 pm »
0
We got sold out (again).
No real social change has ever been brought about without a revolution... revolution is but thought carried into action.
Emma Goldman

So it goes. -- Kurt Vonnegut

Gwendolyn

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Re: Banks Win: States Agree to Settlement
« Reply #2 on: February 09, 2012, 03:51:33 pm »
0
When I heard this I (and I actually did hear the 5 billion # quoted) I thought, "5 billion?  Really?  How does that stack up against the some 7 trillion the banks ran off with?" I would like someone who is good at that sort of thing to show a chart comparing the two.  Anyone? :o

Tayloe

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Re: Banks Win: States Agree to Settlement
« Reply #3 on: February 09, 2012, 04:24:01 pm »
+2
Not good at charts, but something like this:

GREEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEED...

Need.
« Last Edit: February 09, 2012, 04:26:33 pm by Tayloe »

Gwendolyn

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Re: Banks Win: States Agree to Settlement
« Reply #4 on: February 09, 2012, 08:47:22 pm »
0
LOL! Thanks for the attempt Tayloe.  Yeah, something like that.....actually, much much worse I fear.

Tayloe

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Re: Banks Win: States Agree to Settlement
« Reply #5 on: February 09, 2012, 08:52:28 pm »
0
Don't let the other 73 trillion get you down.

After all, it's but money.

Typo.

Jeremy_Occuweather

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Re: Banks Win: States Agree to Settlement
« Reply #6 on: February 10, 2012, 12:22:52 am »
0
This is truly sickening and the WRAL Golo comments on this are enough to make you lose faith in humanity.

Jeremy_Occuweather

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Re: Banks Win: States Agree to Settlement
« Reply #7 on: February 10, 2012, 10:58:03 am »
0
It's bullshit and it's bad for you!

Here are the top twelve reasons why this deal stinks (from naked capitalism):

    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.

    5. The enforcement is a joke. The first layer of supervision is the banks reporting on themselves. The framework is similar to that of the OCC consent decrees implemented last year, which Adam Levitin and yours truly, among others, decried as regulatory theater.

    6. The past history of servicer consent decrees shows the servicers all fail to comply. Why? Servicer records and systems are terrible in the best of times, and their systems and fee structures aren’t set up to handle much in the way of delinquencies. As Tom Adams has pointed out in earlier posts, servicer behavior is predictable when their portfolios are hit with a high level of delinquencies and defaults: they cheat in all sorts of ways to reduce their losses.

    7. The cave-in Nevada and Arizona on the Countrywide settlement suit is a special gift for Bank of America, who is by far the worst offender in the chain of title disaster (since, according to sworn testimony of its own employee in Kemp v. Countrywide, Countrywide failed to comply with trust delivery requirements). This move proves that failing to comply with a consent degree has no consequences but will merely be rolled into a new consent degree which will also fail to be enforced. These cases also alleged HAMP violations as consumer fraud violations and could have gotten costly and emboldened other states to file similar suits not just against Countrywide but other servicers, so it was useful to the other banks as well.

    8. If the new Federal task force were intended to be serious, this deal would have not have been settled. You never settle before investigating. It’s a bad idea to settle obvious, widespread wrongdoing on the cheap. You use the stuff that is easy to prove to gather information and secure cooperation on the stuff that is harder to prove. In Missouri and Nevada, the robosigning investigation led to criminal charges against agents of the servicers. But even though these companies were acting at the express direction and approval of the services, no individuals or entities higher up the food chain will face any sort of meaningful charges.

    9. There is plenty of evidence of widespread abuses that appear not to be on the attorney generals’ or media’s radar, such as servicer driven foreclosures and looting of investors’ funds via impermissible and inflated charges. While no serious probe was undertaken, even the limited or peripheral investigations show massive failures (60% of documents had errors in AGs/Fed’s pathetically small sample). Similarly, the US Trustee’s office found widespread evidence of significant servicer errors in bankruptcy-related filings, such as inflated and bogus fees, and even substantial, completely made up charges. Yet the services and banks will suffer no real consequences for these abuses.

    10. A deal on robosiginging serves to cover up the much deeper chain of title problem. And don’t get too excited about the New York, Massachusetts, and Delaware MERS suits. They put pressure on banks to clean up this monstrous mess only if the AGs go through to trial and get tough penalties. The banks will want to settle their way out of that too. And even if these cases do go to trial and produce significant victories for the AGs, they still do not address the problem of failures to transfer notes correctly.

    11. Don’t bet on a deus ex machina in terms of the new Federal foreclosure task force to improve this picture much. If you think Schneiderman, as a co-chairman who already has a full time day job in New York, is going to outfox a bunch of DC insiders who are part of the problem, I have a bridge I’d like to sell to you.

    12. We’ll now have to listen to banks and their sycophant defenders declaring victory despite being wrong on the law and the facts. They will proceed to marginalize and write off criticisms of the servicing practices that hurt homeowners and investors and are devastating communities. But the problems will fester and the housing market will continue to suffer. Investors in mortgage-backed securities, who know that services have been screwing them for years, will be hung out to dry and will likely never return to a private MBS market, since the problems won’t ever be fixed. This settlement has not only revealed the residential mortgage market to be too big to fail, but puts it on long term, perhaps permanent, government life support.

Tayloe

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Re: Banks Win: States Agree to Settlement
« Reply #8 on: February 10, 2012, 11:35:37 am »
0
Good post, Jeremy.

This settlement does not close the door on State AGs, class action, or individual suit.

Continued action at bank locations will keep the public eye open.

There is much being planned for March and April.

(see BOA meeting this week at the Justice Center)

Information for BOA action and sign ups will be available at the HKonJ gathering.

P.M. me for an email link to Pushback Network, if you would like to make contact for ideas and

helping with upcoming action.

- t

Tayloe

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Re: Banks Win: States Agree to Settlement
« Reply #9 on: February 10, 2012, 01:39:49 pm »
0
http://www.huffingtonpost.com/2012/02/09/mortgage-settlement-bank-reform_n_1266428.html

"North Carolina banking commissioner Joseph Smith will serve as the national monitor of the deal, working from Raleigh".

Derek C

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Re: Banks Win: States Agree to Settlement
« Reply #10 on: February 10, 2012, 02:36:19 pm »
0
http://www.huffingtonpost.com/2012/02/09/mortgage-settlement-bank-reform_n_1266428.html

"North Carolina banking commissioner Joseph Smith will serve as the national monitor of the deal, working from Raleigh".

Hello.

Jeremy_Occuweather

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Re: Banks Win: States Agree to Settlement
« Reply #11 on: February 10, 2012, 05:34:55 pm »
0
Wow looks like we have some planning to do Derek :)

Margaret

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Re: Banks Win: States Agree to Settlement
« Reply #12 on: February 10, 2012, 05:42:43 pm »
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he's got some splainin' to do, lucy
No real social change has ever been brought about without a revolution... revolution is but thought carried into action.
Emma Goldman

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Tayloe

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Re: Banks Win: States Agree to Settlement
« Reply #13 on: February 10, 2012, 07:54:05 pm »
0
Good to meet ya...

Dyck Dewid

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Re: Banks Win: States Agree to Settlement
« Reply #14 on: February 11, 2012, 09:39:04 am »
0
There's a lot going in around the country maybe we aren't very aware of.  For example there's a strategy afoot which engages cities & counties to help solve the problems of 'just' action to those harmed by deceptive bank loans.

The idea is to educate local government to use Eminent Domain to seize properties that are in foreclosure and take them over if clear title is unproven or in dispute... or even if owners do not act responsibly with the property.  It is in their best interest from property tax and neighborhood value standpoint to keep someone living in that home.

Other ideas are to utilize state & local government to establish public trust banks that are more stable & provide mortgage loans with the 'public' holding property collateral instead of investors who care only about themselves. This would eliminate the 'shadow' investment market that uses public to backup private investment.

Much complexity to all this and I'm just finding out via InterOccupy.org conf calls on various topics with authors & other expert guests from all around. Test cases are being worked on and momentum is building.  Call me for more.
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