Readers suggested a topic on the recent legal settlement. “Will ‘rough justice‘ suffice to lay the the robo-signing fiasco to rest?”
A reply, “This is a complete and total bank-friendly deal. My understanding is that they get 50% credit for writing down loans that they service but do not own. So they can write down say $20 billion of loans that they own and take the loss. Or they can write down $40 billion of loans that are owned by someone else, for example pension funds, and the pension funds take the loss. Anyone want to bet which they will do?”
“On top of that, once they convert these loans, they become taxpayer guaranteed. So if they still default, we pick up the tab, not the banks.”
“For the past few years, any time there’s any decision or policy or ruling that the government is going to make, I assume it will be for the benefit of the bankers, because they’re in charge. Bankers run the country, not Obama, not congress. I’ve been doing that, and so I’m never surprised. 100% of the time it’s for the bankers. If something also benefits the people, that’s only a coincidence.”
Another said, “It isn’t ‘justice’ at all. It’s another privileged buyout. NO prosecutions. No one held accountable. Just a fine. That’s right another ’settlement,’ without prosecution. Business goes on as usually, and, gee how draconian, after robbing the taxpayers of hundreds of billions of dollars, to quote the Post…..’$26 billion in return for a measure of legal immunity.’ I think it’s actual FULL legal immunity, but I wouldn’t expect the Post to be in favor of prosecutions or to present this theft of the American taxpayer as anything but really rough on the crooks. It’s their people who are on the ropes.”
One had this, “Real Estate valuations down 30% is kind of crash-ish. Yet the banks look good. A headline hit of $26 Billion also makes the banks look good, as if they were solvent. They are still paying big bonuses and people are demonstrating in the streets against the bank’s greed. It’s all good PR and in a perverse way gives us confidence in the financial system.”
And finally, “Not only does business go on as usual but if you read the article in the New York magazine last weekend they’re already whining that Frank-Dodd unjustly places too many limitations on them and they can’t make money anymore. Their plan now that everything is government guaranteed is to just keep pumping out the loans no matter what the risk. It appears they really do believe they can reinflate the bubble.”
“Man, when we finally do get to the crash that should have happened in 2001 pre all this credit pushing it is going to be ugly.”
“Aside from any monetary awards, I’m interested in whether or not some of this shadow inventory starts to be released, although we did find out yesterday GSE inventory is not included. Also I’m interested in hearing if anyone has an idea about how long will the delay be before we see it released?”
“Could it be that shadow inventory will soon be entered into the mix? Will it be a deluge or a trickle? In tight markets such as mine, will I even notice? Will it produce the never before seen in my market sheriff at the door?”
“Over the entire span of this experience, there have only been 2 homes we passed on thinking the prices would collapse more that we mourn the loss. Two out of hundreds we’ve looked at over years of watching the inventory. If another came our way I think we’d grab it this time. But more than likely it’ll be another year w/o seeing too much of anything. Why do I want to tie a noose around our necks for ‘meh’? Remember, this market can only move sideways. Jobs/incomes are not improving. Credit will not be any looser than it is today. The other people ‘grabbing’ those homes may be investors with cash who may be buying bulk at lower prices than you’d be allowed. I personally wouldn’t seek to compete with them.”
The Bay Citizen. “The Obama administration has pushed hard for the settlement, under which Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial would pay billions of dollars to defrauded homeowners in exchange for a release from further civil liability. Approximately 750,000 borrowers who wrongfully lost their homes to foreclosure will receive $1,800 to $2,000 each, sources said.”
“Administration officials have said the settlement would also help about a million families get a $20,000 write-down on their mortgage. Members of California’s congressional delegation have said the deal represents little more than a ‘drop in the bucket’ for troubled borrowers. Nationwide, about 10 million American borrowers collectively owe $700 billion more on their homes than their homes are worth.”
“‘The amount of people the settlement is going to cover is going to be a tiny portion of the people harmed by the banks,’ said Tim iglesias, a professor of real estate law at the University of San Francisco.”
From WLS TV. “Illinois homeowners facing foreclosure will get a share of the $25 billion settlement reached with some of the nation’s biggest banks. The settlement commits the banks to reduce mortgage principals, refinance underwater mortgages and cash payouts to some who lost their homes. ‘Today we pick up another piece of the wreckage caused by the foreclosure crisis,’ Illinois Attorney General Lisa Madigan said. ‘Today’s settlement should serve as a warning to financial institutions that there are consequences for engaging in practices that jeopardize the stability of our communities and our economy.’”
“Sherri Norris says she’s losing a three-year foreclosure fight for her Broadview condo. She hopes a new deal will help her move forward. ‘I’m hoping and praying it’s not too late,’ she said. ‘I’m just being prayerful.’”
“Geoff Smith, executive director of the Depaul’s Institute on Housing Studies, said he hopes the settlement brings relief to homeowners facing foreclosure. ‘If run effectively, it will help homeowners in distress but I don’t think we can really expect it to kick start the market,’ he said.”
“As that settlement trickles down to homeowners, Norris is preparing for an eviction, moving out and staying with relatives. ‘It’s very scary because you don’t’ know when they are going to come and bring the sheriffs in and tell you to come and move out,’ Norris said. ‘You just take one day at a time. It’s been very frustrating. (It) keeps you on pins and needles all the time.’”
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