We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust. It is a fraction of the cost of the legal expenses when foreclosures are challenged. It’s a great deal for the banks because no one is at any of the servicers going to jail for forgery and the banks have set the upper bound of the cost of riding roughshod over 300 years of real estate law.
And No. 9:
There is plenty of evidence of widespread abuses that appear not to be on the attorney generals’ or media’s radar, such as servicer driven foreclosures and looting of investors’ funds via impermissible and inflated charges. While no serious probe was undertaken, even the limited or peripheral investigations show massive failures (60% of documents had errors in AGs/Fed’s pathetically small sample). Similarly, the US Trustee’s office found widespread evidence of significant servicer errors in bankruptcy-related filings, such as inflated and bogus fees, and even substantial, completely made up charges. Yet the services and banks will suffer no real consequences for these abuses.
The Los Angeles Times notes that the settlement is “too little, too late” for most homeowners.
It'd be nice if reporting on the natural gas energy boom could include the environmental costs documented by outsider press and occasionally the nytimes and propublica...
Especially considering how outsider press are being treated as they attempt to report on the dark side of the boom.
http://www.latimes.com/news/local/environment/la-me-gs-gasland-director-fox-arrested-filming-house-subcommittee-20120201,0,4337363.story
"At the behest of the Republican leadership of a House of Representatives subcommittee, Capitol Police arrested Joshua Fox, the maker of the Oscar-nominated documentary “Gasland,” when he tried on Wednesday to film a subcommittee hearing on hydraulic fracturing, a controversial method used to tap oil and gas reservoirs...
Congressional hearings are open to the public. Anyone with a cellphone camera could record the proceedings, as a video on Huffington Post of Fox’s arrest shows."
And yeah, the agreement is basically papering over wall street crime which would be too expensive and too politically costly to the campaign to prosecute. Plus the global financial system is delicate and exposing criminal behavior and other tidbits of wallstreet's dirty underthings might make the market sad :(
Fine. But what I want reporters to ask is why anything to help the little guy, from UI extensions to principle reduction:
http://www.huffingtonpost.com/mobileweb/2012/02/08/democratic-congressmen-principal-reductions_n_1263539.html
"The exchange of home equity for a principal reduction would have addressed the problem of moral hazard (the concern that borrowers would default on purpose), according to the former staffer.
But senior executives nixed the program as they were more concerned about moral hazard than minimizing losses for taxpayers, the ex-staffer told HuffPost.
By not arranging for principal reductions, Fannie Mae and Freddie Mac are prolonging the housing crisis, economists say."
poses a moral hazard while all these bailouts and "clearing of the record" actions don't. The next time some idiot banker or government official brings up moral hazard as a justification for hurting more poor people, ask "why do we have all these protections in place for the amoral rich?"
#1 Posted by Thimbles, CJR on Fri 10 Feb 2012 at 05:54 AM
Taibbi bashes a bad article which allows the wall street crowd to whine way too much.
http://www.rollingstone.com/politics/blogs/taibblog/why-wall-street-should-stop-whining-20120208
"And who’s to blame? According to Sherman's interview subjects, it has nothing to do with the economy having been blown up several times over by these very bonus-deprived bankers, or with the fact that all conceivable public bailout money has essentially already been sucked up and converted into bonuses by that same crowd.
No, it instead apparently has everything to do with the Dodd-Frank bill, and specifically the Volcker rule banning proprietary trading, which incidentally hasn’t gone into effect yet....
The financial services industry went from having a 19 percent share of America’s corporate profits decades ago to having a 41 percent share in recent years. That doesn’t mean bankers ever represented anywhere near 41 percent of America’s labor value. It just means they’ve managed to make themselves horrifically overpaid relative to their counterparts in the rest of the economy.
A banker's job is to be a prudent and dependable steward of other peoples’ money – being worthy of our trust in that area is the entire justification for their traditionally high compensation.
Yet these people have failed so spectacularly at that job in the last fifteen years that they’re lucky that God himself didn’t come down to earth at bonus time this year, angrily boot their asses out of those new condos, and command those Zagat-reading girlfriends of theirs to start getting acquainted with the McDonalds value meal lineup. They should be glad they’re still getting anything at all, not whining to New York magazine. "
These guys get a deal letting them off the hook for ripping us all off and the thanks they give is in whining to a magazine how hard the new weak regulations are on their bonuses, but at least they don't have to worry about Moral Hazard!
#2 Posted by Thimbles, CJR on Fri 10 Feb 2012 at 06:18 AM
Moral hazard is for poor people.
It's always been for poor people.
#3 Posted by Thimbles, CJR on Fri 10 Feb 2012 at 02:38 PM
I cannot tell you how sick I am of hearing this:
http://www.nakedcapitalism.com/2012/02/mortgage-settlement-as-attorney-general-sellout-deal-is-not-done-and-final-version-guaranteed-to-be-worse-than-advertised.html
"You know it’s bad when banks are the most truthful guys in the room.
Remember that historical mortgage settlement deal that was the lead news story on Thursday? It has been widely depicted as a done deal. The various AGs who had been holdouts said their concerns had been satisfied.
But in fact, Bank of America’s press release said that the deal was “agreements in principle” as opposed to a final agreement. The Charlotte bank had to be more precise than politicians because it is subject to SEC regulations about the accuracy of its disclosures. And if you read the template for the AG press release carefully, you can see how it finesses where the pact stands. And today, American Banker confirmed that the settlement pact is far from done, and the details will be kept from the public as long as possible, until it is filed in Federal court (because it includes injunctive relief, a judge must bless the agreement)...
Why is it deeply troubling that the attorneys general have gone along with the Administration’s messaging and have all fallen in line with the “biggest Federal-state settlement ever” when no such settlement in fact exists? This isn’t just acceding to the Administration’s pet wish to build on its State of the Union PR. They’ve completely abandoned their negotiating leverage at a critical stage...
The only power any party has in a negotiation is his threat to leave the bargaining table. The AGs can no longer do that...
Reader Mikent was correct when he called this deal a robosettlement. Just like its namesake, it’s more about getting it done than doing it right."
It's like the Bush tax cut extension / debt ceiling negotiation again. They choose to hobble themselves so that they have "no choice" but to screw over their constituency / base.
http://www.tnr.com/article/politics/100595/obama-escape-artist-excerpt
"After the midterm elections, Geithner’s chief of staff, Mark Patterson, thought the administration should try to defuse the debt-limit issue once and for all before the incoming Republicans arrived. He drafted a law giving the president the authority to raise the debt ceiling unilaterally and sent it to the White House. To sell it politically, the president could explain that renewing the upper-income Bush tax cuts, as Republicans were then demanding, would cost the government $700 billion over ten years, forcing it to hit the debt ceiling sooner.
The White House was initially interested, but dropped the idea once Republicans made clear they would oppose it. But, of course, the way to win concessions from obstructionist opponents isn’t to sound them out quietly. It’s to cause them public discomfort. As one former Treasury aide who was involved explains: “Imagine the alternative reality where the president comes out in December and says, ‘I understand you want to increase the high-end tax cuts. But that will make the deficit go up. … I am willing to do some of what you want to do, but you have to pay for it by raising the debt ceiling.’” At the very least, it would have put the GOP on the defensive.
But the White House didn’t have an appetite for going to war so soon after the midterms. Instead, it chose to bargain behind the scenes, renewing the Bush tax cuts in order to win more tax benefits for workers."
What is accomplished by negotiating behind the scenes with banks or republicans and giving up your leverage? They're still going to ca
#4 Posted by Thimbles, CJR on Sun 12 Feb 2012 at 07:50 PM