Bank Bailout Day, February 9, 2012

I may or may not have more to say about this.

But I’m thinking of declaring this Bank Bailout Day, a holiday of the stature of President’s day.

Forty-nine states, every one but Oklahoma, as well as federal regulators, will participate in a foreclosure fraud settlement that will release the five biggest banks (Wells Fargo, Citi, Ally/GMAC, JPMorgan Chase and Bank of America) and their mortgage servicing units from liability for robo-signing and other forms of servicer abuse, in exchange for $25 billion in funding for legal aid, refinancing, short sales, restitution for wrongful foreclosures and principal reduction for underwater borrowers. The announcement will be made on Thursday.

[click through for the details]

And then there’s the settlement price: $25 billion, divided up several ways. $3 billion will go toward refinancing for current borrowers who are underwater on their loans, as well as short sales. $5 billion will go as a hard cash penalty to the states, which can use them for legal aid services, foreclosure mitigation programs, and ongoing fraud investigations in other areas (one official close to the talks feared that much of that hard cash payout will go in some Republican states toward filling their budget holes). The federal government will get a cash penalty as well. 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.”

If you read DDay’s full post (or if you’ve read anything here), it’s clear that the amount of fraud was astronomical: 60% failures in one case. And if you’ve read that far, you know this is a bail out, every much as the billions gifted to banks in September 2008 was a bailout.

The Administration wants to call this a settlement.

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Emptywheel Twitterverse
emptywheel I was in Denali park in 1991. Everyone, especially park staff, called the mountain Denali. Blame Poppy Bush.
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emptywheel Rode to the town Hilhof Dairy is in today--it's pretty. Would a bike pilgrimage to a dairy be nuts?
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JimWhiteGNV Why did Obama rename a mountain after an SUV?
29mreplyretweetfavorite
emptywheel @KagroX At least he didn't rename it Mount Shell
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emptywheel Really hoping Rove tweets abt Denali. It's the kind of thing that might genuinely irk him.
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emptywheel @TeresaKopec I do think that's why China can crash w/o causing general malaise. For almost all people gas price more important to budget
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JimWhiteGNV RT @GatorsChris: “@GatorsChris: Final: No. 8 #Gators 3, No. 1 FSU 2.”
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bmaz And, yet, that was not Snowden's plan, the US forced him into it. Schindler still relentlessly dishonest on subject. https://t.co/z5N6qPCmoE
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bmaz @jaketapper Excellent interview. Refreshing to see a candidate actually answer your questions. You should see how people respond at rallies.
6hreplyretweetfavorite
emptywheel @B_D_Silver @BenjySarlin could we by ave legalzed pot inside our walls? Pay no taxes?
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emptywheel @RT4_Chicago @charlie_savage found it not me. But he's off in Europe being civilized I think.
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