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 @PhilPerspective @alexisgoldstein But Rudy IS a monster, and long been known as such to those of us in crim def community going back to SDNY
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bmaz @PhilPerspective @alexisgoldstein 5'9" according to teh Google
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emptywheel RT @PGEddington: DHS Set To Destroy "Einstein" Surveillance Records http://t.co/z0AcbTRjrD
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bmaz @ScottGreenfield I watched it a couple of times on NSA surveillance law when friends were on. Not so good.
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emptywheel @TimothyS That's a piece from you I'd love to see. Especially since people made such a big deal abt Qatar and Brookings.
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emptywheel RT @TimothyS: Read this about Abe's Japan & consider that his right-wing gov't is a major donor to the shadow Pentagon AKA @CNASdc: http://…
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emptywheel @MiekeEoyang Unclear if trove Udall was hypothetically referring to was US Co data collected overseas, but could be. @KevinBankston
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emptywheel @MiekeEoyang But there is still issue both Feinstein & Udall raised, "troves" of USP data that should be treated under FISA @KevinBankston
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bmaz @alexisgoldstein @PhilPerspective But you are nice and good and all; that's different!
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bmaz @alexisgoldstein @MichaelEDyson @meetthepress Rudy 911 was just gross.
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bmaz RT @alexisgoldstein: Thank God @MichaelEDyson was there to speak truth to Rudy Giuliani's disgusting nonsense on @MeetThePress http://t.co/
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