Today’s bank rally lets you know exactly what the Street thinks about the proposed mortgage settlement. The big up could reflect the belief that it is a giveaway/bailout, and lets the banks get off scott-free from their criminality.

Category: Bailouts, Legal

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

19 Responses to “Banks Like Proposed Fraudclosure Settlement”

  1. Petey Wheatstraw says:

    Looking back over the past 10 years, or so (hell, let’s make it 30 years), was there ever any realistic doubt as to how this criminality would be handled? Anybody seen any Tobacco Settlement money, lately?

  2. Julia Chestnut says:

    Rat bastards.

  3. Julia Chestnut says:

    Oh – “civility in [your] discourse” — I mean “rat bastards,” of course, in the nicest way possible.

    In all seriousness, you can’t blame the banks for using their slaves, the “elected representatives” as they see fit. But it does make you wonder at what part the sleeping giant begins to awake. There is only so far you can push even a dog before it bites.

  4. mathman says:

    And so it goes: the captured government takes the rest of us down (in standard of living) to keep the few in their exalted states of delusion.

    Some notes going forward this on the environment:

    http://climateprogress.org/2011/03/08/news-house-gop-bill-smashes-environmental-safeguards-climate-change-affects-those-least-responsible-study/#more-44088

    and:

    http://www.shtfplan.com/headline-news/of-course-they-will-fire-on-us-citizens_03042011

    for when it gets “ugly.”

  5. curbyourrisk says:

    It is all bullshit……the money trees grow to the sky when fertilized with bullshit like this.

    I do wish every bank and banker a painful does of reality, but it will never happen, for they are our overlords…. Long live the bank / long live the banker……

    BOOM

  6. Bill Wilson says:

    Holding people accountable has certainly not been a theme of the Obama administration. Please don’t respond to me by pointing out the fact that Bush was a bigger fool. That may be true, but it is not an argument.

    ~~~

    BR: We haven’t had a President who held people accountable since Eisenhower . . .

  7. rfullem says:

    Hi BR

    Appreciate it if you could as the AGs where my 250K in CASH savings is that I used in 2007 as a down payment on my first and only “home”. It has gone missing and I hoped to use it for the kids education. Maybe it is under someone’s desk somewhere or in one of the banker Porsches . thanks very much.

    regards

    Housing Speculator (somehow got that title from Obama AND Santelli)

  8. Petey Wheatstraw says:

    JC:

    “Rat bastards” is overly polite and generous when referring to the corporatist cabal, although it does somewhat defame legitimate rat bastards. Forget pushing, apparently, the American public has to be horse-whipped repeatedly before it even considers defending itself.

  9. louis says:

    BR you should do a where are they now. Here’s what the former NovaStar team is up too. The bios are great.
    http://credentiagroup.com/company_info.html

  10. AHodge says:

    my early take–when i first saw the Attornyes G ding servicers for abt $20 billion
    i ask
    why the banks sign up unless MERS not enforceable? and they get out from under that?
    i thought it good to draw line between vacant and living in foreclosures, make MERS enforceable right away for the vacant. but now it looks like a lot of that $20 bio goes back to the banks to pay for the principal writedowns they should have eaten anyway, what a shell game…

    i cant tell if the banks unfreeze the 2nd mortgages
    but prob not
    there no talk of good accounting, banks get enforceability in return for the little writing down they will do
    AGs stop bad foreclosures? they already stopped anyway with MERS unenforceable in most states.

    so the AGs get some billions to spreadaround,
    claim they ding the banks for many more billions
    that are actually principal writedowns that should have been forced on the banks anyway
    foreclosures rise again
    short sales are prob
    still frozen acconting still massively unfixed
    the AG s and OBAMA since he weighing in had the banks by the balls and handed them the keys–it seems?

  11. b_thunder says:

    Even if the banks are forced to pay $20B in fines, Obummer wants to recycle it right back to the banks in form of “principal reduction”! Of course banks would love that!

    Totally misguided economically in terms of both economics and fairness (if you keep making payments- you get nothing, if you’ve been renting all this time – you get nothing) but surely good for the banks.

  12. carleric says:

    When will we wake up, assign blame and send these a**holes to prison? The answer is never as most of his country already eats at the Federal governments slop trough…pigs to the end…its like this silly assed budget debate…cut spending but not to my campaign contributors…what a freaking mess and it just keeps getting more idiotic.

  13. rfullem says:

    anyone heard of gross systemic negligence? If so and you are an attorney, please let me know. would love to hit them in the pocketbook – no settlement either.

  14. jrysk says:

    Regardless of whether there is any “agreement” in the
    future with the servicers, the document itself reveals the policy toward housing
    of both the United States Government and the States. I think that if you
    examine the terms you will see that it concedes what has long been sought by
    housing advocates: a right to housing.

    In particular, the United States has long maintained (Geithner just restated it
    the other day) that there is no RIGHT to a mortgage modification. There is a
    reason the government keeps taking this line, even though it has seemed that it
    is encouraging mortgage modifications.

    It has to do with the Constitution. Housing enjoys only “minimum scrutiny”
    under Lindsey v. Normet. That is, there are virtually no individually
    enforceable rights in housing, and the political system has nearly absolute
    control over housing. Housing policy need only be “rationally related to a
    legitimate government purpose.”

    One of the reasons the Court did not grant
    housing a higher level of scrutiny in that case was its concern over the idea
    “that the Constitution expressly protects against confiscation of private
    property or the income therefrom.” Mandated reductions of mortgage principal
    are exactly that.

    The concern of the political system is that if a higher level of scrutiny is
    granted for housing–if housing is granted, for example, intermediate scrutiny,
    which says that an eviction would have to “substantially advance an important
    government purpose”–then virtually all power over housing (i.e., the money
    related to it) would leave the political system and be placed in the hands of
    individuals according to court-mandated standards. Ask any lawyer what would follow if housing enjoyed intermediate or strict scrutiny. “A revolution,” will be the answer. Why is this so? You can see it in the factors which enter into such things as the IRS’ collection financial standards, and factors used by the U.S. government to determine whether a mortgage is at risk of default. The U.S. concedes that there are facts which are objectively related to housing: they are a part of housing. Once you grant a higher level of scrutiny for housing, rights also flow to these related facts, which, for the U.S. government, include education medical care, income, employment and several other facts.

    However, it has become increasingly clear that U.S. ownership interests in
    financial institutions mean that these institutions are acting as the government
    in HAMP modifications. Thus, the HAMP procedures are actually requirements
    under the Due Process Clause of the Fifth Amendment. Under the servicing
    agreements between the servicers and financial institutions/the U.S., there is a
    third party beneficiary Federal Common Law right to a HAMP modification. (See
    in particular, the Judge’s reasoning in the Southern District of California
    Marques v. Wells Fargo case.)

    The U.S. has fought a losing battle stating that HAMP does not create a housing
    right, even though a spate of poorly/casually reasoned cases seem to suggest
    otherwise–and by the way this is a right to a HAMP modification which in FACT
    reduces the risk of housing loss, not necessarily the government’s 31% debt to
    income level. This is a question of fact for the trier of fact. It also includes risk of loss of those facts which are related to housing, such as medical care.

    Of course, what the U.S. has feared is that any increased right in housing for
    homeowners will be instantly extended to renters under equal protection, and then to all housed individuals (and finally to the homeless). But now we see by the “Terms” (generated by, among others, the Department of Justice), that the Government DOES believe housing enjoys a higher level of
    scrutiny, and that there is indeed an individually enforceable right to housing.

    Look through the document to see how often the word “shall” is used. And it is
    used to require modifications. Also, notice that the new “review” process must
    be by an “independent” entity. This means quasi-judicial (and soon to be
    official judicial) review in order to see that the right is enforced.

    So really, the “Terms” are the surrender of the United States and the States to
    the proposition that HAMP creates an individually enforceable right to housing.

    That is the importance of the “Terms” and you should let your readers know that.
    Cheers,
    John Ryskamp

  15. obsvr-1 says:

    it’s a recurring nightmare, one gets financially raped, seeks justice, only to find that the rat bastards banksters and fraudsters have within their ranks the ‘cops’ whether it be SEC, DOJ, AGs. The last 3 years have proven that corruption pays and out of the dust of the crisis rises, in full view, a puppet government with strings attached to the oligarchs. We have been screwed, the crisis presented a fork in the road; one path to restoring a constitutionally sound free market system under a ethical rule of law and the other path continuing the corrupted oligarchy; our leadership chose unwisely. How sad for our children and grand children.

    I am continually amazed that the “beaten dogs” have not turned on the club toting rat bastards …

    To pile on to the depressing content:

    http://golemxiv-credo.blogspot.com/

    page down to Thursday, 3 March 2011
    Regulatory Arbitrage – what bankers don’t have to tell us

  16. AHodge says:

    so i read it
    it does have something about fees, which have pushed many INTO a no workout situation
    a lot of noble boilerplate about please do short sales and must review but nothing forcing to do them,
    no writedowns, or anything abt the 2nd mortgage prob which is key.
    nothing directly in here about MERS, which is “under review” nothing on accounting
    but it provides doc standards for foreclosing, which it looks like they can do
    subject to a few rules as laid out here, mainly the blatantly obvious showing they have a claim stuff. guess the judges needed instruction on that

  17. rfullem says:

    thanks for the explanation on mortgages, home ownership, etc. What about the equity? Can the home financing system (banks/underwriters/Fannie/regs/appraisers,etc) be so grossly negligent as to effectively put a home buyer at risk of losing all equity? This assumes that the home financing “system” had a duty it breached and caused damages.

    On writedowns, I don’t understand the math. it costs about 50K to foreclose (MBA says) yet cut principal by 50K (or PV it) and that person can afford the average 200K home. I get the fee thing but seems like something is askew at these banks?

  18. [...] Barry Ritholtz pointed out: Today’s bank rally lets you know exactly what the Street thinks about the proposed mortgage [...]

  19. [...] • TBP: Banks Like Proposed Fraudclosure Settlement [...]