This really ticks me off. It's essentially a get-out-of-jail-free card, a bailout in the worst possible way, and a big "screw you America" wrapped in a package that demands no substantial reforms. This whole thing is a crock and I cannot believe there was not one AG in the country and not one person from the Obama administration that stood up to this crap (The Oklahoma AG didn't sign because he didn't believe the banks needed to be penalized at all). We should be prosecuting, not dealing. Here's the best summary I've seen: Yep, they screw you on the loan, misrepresent the security to investors, robo-sign your foreclosure, refuse to talk to you or consider alternatives, take your home, and then give you $2k and head back to the country club. Nice Rule of Law we have in this country. Here's the money quote from the NYTimes article which dresses up their reporting with a headline that suggests this is being done "for Homeowners." Yes, I suppose it is good for the banks to get this behind them. I would much rather have a settlement that enriches me and protects me from criminal and civil penalties instead of having to defend myself against RICO charges, which is what should have happened long ago. This agreement does nothing except reward a small group of people who intentionally took advantage of a large group of people and stole a bunch of money from them. Though with all the attention of these mean government regulators, surely they will stop doing those kinds of things now, right? Welcome to the third world America.
Disappointing As Mr Dylan says…Steal a little and they throw you in jail. Steal a lot and they make you king. Does this preclude anyone from suing the banks if they refuse the settlement?
That's a good question. But, assuming people still could, we are necessarily talking about a class of people who don't have a lot of money at their disposal to bring a legal fight, which is how they got foreclosed on in the first place. So, for the great majority, it'll be 2,000 bucks or no justice at all. I feel like our AGs betrayed us. On one hand, people righfully foreclosed upon get money for nothing while others who got bent over are paid a pittance for the injustice suffered. There seems to be no precision here in how people are compensated, and there's no telling if the total punishment to the bank is commensurate to the damage. To say nothing of the crimes.
I would like to have seen civil charges against those directing the forging of documents and other frauds. I'm not sure how many of the 'wrongfully foreclosed' were wrongfully foreclosed through procedural matters (bad paperwork and transfers by the banks etc -- but legitimately in arrears or delinquent) vs how many were wronged by the banks through a foreclosure that should not have happened as the homeowner was not in breach of their commitments. For the former -- the $2K payment seems just. Almost a windfall -- sort of like a class action settlement for the banks arrogance. To the latter I suppose they could choose not sign on and seek actual damages. Possibly there's a class of these folks that could seek something further. But....it's tough to accept that the robosignings, and forgeries don't warrant criminal charges against individuals.
This is an ugly issue, but goes back to the whole reason we bailed out the banks in 2008: like it or not, if the banks fail, the middle class gets screwed far more than the banks. So from the government's perspective, they don't *want* to try to crush the banks, because that will destroy the economy for everyone else. It's a crappy situation, but we go back to arguing whether it's better to damage the country in order to hold banks accountable, or accept a crappy situation to help get the economy moving again. And FWIW, the $5 billion is only part of it - in total, the banks will be paying $25B to $40B in penalties, almost all of which goes straight to homeowners in the form of discounted refinancing and principal writedowns. I actually don't like this part though - I'd rather than money go to the government to fund Obama's much more universal proposed foreclosure program he talked about in the SOTU, since Congress is unlikely to approve it.
Wait - the only people getting money from that $5B fund are the ones that were wrongly foreclosed on - not the proper foreclosures (at least according to my understanding). That's absolutely true. The agreement creates a lot of arbitrary winners and losers.
If i'm not mistaken, this was just the civil suit .. . it's by no means a get-out-of-jail free card: Edit - I should also say, I don't think this quote you posted accurately reflects the settlement (from what I've read - haven't read the whole thing,so I could be wrong) <TABLE border=0 cellSpacing=0 cellPadding=6 width="100%"><TBODY><TR><TD class=qBox>Out of that $5 billion, up to 750,000 borrowers wrongfully foreclosed upon will get a $1,800-$2,000 check if they sign up for it, the equivalent of saying to them “sorry we stole your home, here’s two months rent.” </TD></TR></TBODY></TABLE> I think this refers to people who were wrongfully foreclosed upon for procedural reasons (i.e., robosigned instead of human signing the paperwork) but not wrongfully foreclosed upon because teh bank is seizing the wrong house or got money and didn't credit it, etc or something like that.
very few people qualify for the mortgage relief program. i too much don't care about the wrongfully foreclosed homes, not to be cold, i just think that's not as big of an issue. i actually don't like giving people relief on their homes if they are underwater. if you can pay your mortgage just pay it. who cares if the loan is worth more than the home.
