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
bmaz @ZerlinaMaxwell Nor, was I; Ive have been doing this at the trial level for nearly 30 years. I'll stand by the fact statutes should remain
1mreplyretweetfavorite
bmaz “@horvitzlevy: California Supreme Court's May calendar includes three Horvitz & Levy cases.: http://t.co/USbKmEHxoT” no Eisenberg cases?
16mreplyretweetfavorite
bmaz @APribetic @theresaexpitall @rainn01 @hillaryclinton @zerlinamaxwell Um, no. Statutes exist for a reason, ie fairness to system+def's rights
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JimWhiteGNV @emptywheel Shhh! I'm pretending to pay attention to the horse show while streaming #Gator baseball to my hearing aids.
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emptywheel Pitcher HR. Go Blue! @JimWhiteGNV
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emptywheel @biasedreporter Think @joshgerstein is right that she was prolly thinking of Roving, but in context ref was to 215.
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emptywheel @KenDilanianAP Right. But that's part of reason IC def of "bulk" is so meaningless. @Krhawkins5 @charlie_savage @csoghoian
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emptywheel @charlie_savage Yup. Not "targeting" Americans but we know they've gotten "troves" of USP data w/no protections @csoghoian @KenDilanianAP
45mreplyretweetfavorite
emptywheel @csoghoian Not that different from Petraeus, tho his stuff was more sensitive.
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JimWhiteGNV Honey, I shrank the horses. http://t.co/UIHjRa6ksm
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emptywheel @Krhawkins5 I just can't get over that Burr claims he's being responsible for risking PATRIOT crash for 11 measly bullet points.
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