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.

Tweet about this on Twitter0Share on Reddit0Share on Facebook0Google+0Email to someone

27 Responses to Bank Bailout Day, February 9, 2012

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
Emptywheel Twitterverse
bmaz Ryan Fitzpatrick, QB of Houston Texans: http://t.co/6hrqa07bsq Ed Smith, Captain of the Titanic: http://t.co/fPP57yVcWn You make the call.
5hreplyretweetfavorite
emptywheel I bet Keith Alexander is wondering why he doesn't get away w/the tricks Dick Cheney used to get away with, like dual hatting his spies.
5hreplyretweetfavorite
bmaz The Obama Admin is unprecedented at prosecuting leaks. So, where is the outcry+prosecution of FBI and DOJ/CRD over #MikeBrown Rule 6 leaks?
5hreplyretweetfavorite
emptywheel RT @nakashimae: FBI's Joe Demarest: ‘No indication’ #JPMorgan hacked as payback for western sanctions on Russia http://t.co/pbHRzSUILa via …
6hreplyretweetfavorite
JimWhiteGNV Steel Curtain? Nah. More like Asphalt Speed Bumps.
6hreplyretweetfavorite
emptywheel @ldpws Thanks.
6hreplyretweetfavorite
JimWhiteGNV They are booing the rapist at the giant ketchup bottle.
6hreplyretweetfavorite
emptywheel @MelissaRyan I'm just ignoring them until next week then mass deleting them. Why doesn't Gmail have a mute button? I guess a filter, maybe?
6hreplyretweetfavorite
JimWhiteGNV Alabama House Speaker Mike Hubbard indicted on 23 felony corruption charges by Lee County Grand Jury http://t.co/qFznlxm0jL via @aldotcom
6hreplyretweetfavorite
emptywheel @Aennie1 Haven't tracked it. I'd have to put some thought to it. Sorry.
6hreplyretweetfavorite
emptywheel But don't worry bc that obstruction only underlies the whole PRISM system. What could go wrong?
6hreplyretweetfavorite
February 2012
S M T W T F S
« Jan   Mar »
 1234
567891011
12131415161718
19202122232425
26272829