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 @bsdtectr @davidaxelrod @benwizner Long way to go, but I have some questions about what prosecution is doing w/only a 1st degree+no backups.
bmaz @astepanovich Oh hey, two of my favorite humans! That's awesome. Alex is a riot.
emptywheel @climatebrad We have biometrics of all non-citizens, including regular green card holders. It's their test for biometrics for us.
bmaz I heart Alex Kozinski
bmaz @davidaxelrod @benwizner Oh, and by the way, yes this choice of procedure and charging does raise questions about the prosecution
bmaz @AriMelber Yes, was excellent work by @muckrakery @tvkatesnow @MSBC
bmaz @davidaxelrod @benwizner Hi there. Van Dyke is STILL not indicted. It is a single count direct complaint with a prelim setting.
bmaz Well, they got a Russian plane shot down today, how much more they want?
bmaz RT @thekarami: Exclusive video confirming Trump's accusation that Arabs were celebrating after 9/11...I think.
bmaz RT @charlie_savage: As OLC chief, Moss signed off on '99 Kosovo NATO air war & War Powers Res dispute-precursor to Libya & same in '11 htt…
bmaz @emptywheel I'd as soon never hear about either group again.
bmaz @shortbusworld Make this argument to somebody else. I am not your guy. This is absolute bullshit.
February 2012
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