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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bmaz @nycsouthpaw Welp, whither Melgen may be the key question. Ante seriously upped against him. Does he hang tough or roll?
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bmaz Re: ECF/PACER RT @carlmalamud Redacted version of the Monday privacy breach notification to the courts. https://t.co/X1wGjI3IHs
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bmaz @dmataconis I miss Munch and Cragen far more than Stabler.
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bmaz Pennsylvania man uses chain saw to slay wife, then himself http://t.co/f0T4RtVeVk via @YahooNews
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bmaz RT @nycsouthpaw: If you don't steal $9 million from Medicare while importing foreign hotties, you probably don't need to keep a U.S. Senato…
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bmaz @hankdeanlight @yvonnewingett Welp, @DrEricMeyer is my Rep, and a pretty darn smart guy, so I believe him.
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bmaz @AllThingsHLS @EmergencyNet Sure, but when I use it that way, I am probably saying it in a, hopefully, pertinent sense.
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bmaz @AllThingsHLS @EmergencyNet My quick scan is that it's defensible by Menendez, but there is some real meat that a jury could easily bite on.
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bmaz RT @conor64: Writing at newspaper that litigated NY Times Company vs. U.S., Charles Blow casts corporations invoking 1st Amendment as new, …
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bmaz First they came for the churros......"Police Arrest 3 Women For Selling Churros in Union Square Subway Station" http://t.co/Lsr8uczpfz
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bmaz @AllThingsHLS @EmergencyNet Hey now, I stand by the veracity of that Menendez quip!
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JimWhiteGNV RT @lrozen: Historical negotiation: see Bloomberg's Jonathon Tirone, longest continuous for SoS since Camp David https://t.co/Q6hqr7HnoZ
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