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 @alanhkaiser What? Sorry, that's fucking nuts. Of course he's lying. @trevortimm
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emptywheel @liferstate Oh, they're generally sorted. I need to go through & decide what to keep, what someone might want, what has too many annotations
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emptywheel @billmon1 Nothing a few InfoOp fliers can't fix.
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emptywheel @John_Hudson Well, I think I've got a solution! Primary challenge threats! It's the solution to everything!
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emptywheel @B_Amer Yup. Didn't expect that kind! Music related? @alreinke
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emptywheel @John_Hudson To be fair, kind of hard for city to deal w/100 year flood and top 10 snow year in same year. Blame Fat Al Gore.
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emptywheel @B_Amer ? Am I not looking closely enough at pics? @alreinke
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emptywheel @B_Amer Fun pic. Looks gorgeous. (Tho hot.)
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emptywheel @polyparadigm Since DeVos may demand anything on threat of primaries, he should just demand they use some ... novel material.
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bmaz @Gaius_Publius Yes, saw them once or twice a year back in the day against the Suns. Still, been long time, had forgotten ho evil really were
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emptywheel @B_Amer You missing someone??
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emptywheel @MazMHussain No. By calling white "terrorists" hate criminals, they avoid doing any network analysis. http://t.co/PyxTwyh8Bj
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