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View Diary: NY Atty. Gen. Schneiderman LOVES Today's Mortgage Fraud Deal. UPDATED x3 Liz Warren Likes it Too! (261 comments)

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  •  Here ya go! (43+ / 0-)
    Today’s settlement shows a significant commitment to helping struggling homeowners stay in their homes. But it needs to be the beginning, not the end, of efforts to hold the big banks accountable with meaningful penalties that demonstrate the rules and the law apply to everyone, no matter who your friends are or how many lobbyists and lawyers you can hire. Moving forward, further investigation and prosecution are needed to bring our long national mortgage nightmare to an end.
    But don't let some people on the site hear about it, or they'll turn on Warren.

    You never trust a millionaire/Quoting the sermon on the mount/I used to think I was not like them/But I'm beginning to have my doubts -- The Arcade Fire

    by tomjones on Thu Feb 09, 2012 at 07:46:38 PM PST

    [ Parent ]

    •  The DOJ also made a forceful (23+ / 0-)

      commitment to continue their investigations and prosecutions.

      It would have been more high drama to perp walk the CEO of Bank of America I suppose, but that still leaves all those people facing foreclosure, with no reparations at all.

      What do we really care about, revenge or justice?

      I'm not looking for a love that will lift me up and carry me away. A love that will stroll alongside and make a few amusing comments will suffice.

      by I love OCD on Thu Feb 09, 2012 at 08:03:47 PM PST

      [ Parent ]

      •  justice necessarily includes penalizing those who (26+ / 0-)

        .... have violated the law and harmed others.

        Yes, we have to make the victims whole.

        But the purpose of a criminal trial is not to give back a robbery victim's pocketbook, it's to ascertain if the suspect is guilty and then if so, to lock him up as a punishment and as a deterrent to others.

        That's not revenge.

        Revenge would be to take the banksters out and shoot them. Without trials. And though I have to confess to a certain degree of schadenfreude over the prospect of Lord Bankfiend begging for mercy before a firing squad, the bottom line is that those sorts of sentiments are inherently barbaric and we must hold ourselves to a higher standard. Federal prison will have to do.

        "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

        by G2geek on Thu Feb 09, 2012 at 08:54:30 PM PST

        [ Parent ]

        •  So that's what makes this a really good idea! (15+ / 0-)

          You get between 25 and 46 billion dollars from the banks for the injured parties, AND you can still prosecute fraud.

          A lot of the uproar is from people who are missing the facts and uproaring anyway.

          The downside is that most of the really bad loans were written by shadow banksters who were unregulated and uncontrolled. They're under the purview of the CFPB now, but there's no way to prosecute the worst offenders.

          I'm not looking for a love that will lift me up and carry me away. A love that will stroll alongside and make a few amusing comments will suffice.

          by I love OCD on Thu Feb 09, 2012 at 10:07:54 PM PST

          [ Parent ]

          •  Pension Fund losses pay for write-downs (3+ / 0-)

            I'm not saying this deal isn't worth taking, but the banks are writing down loans they have already sold as securities to pension funds.  The banks are not replacing that money, the pension fund is loosing it.

            Example - B of A $200,000 mortgage sold to Alabama public employees retirement fund as part of a 1 million dollar security.  B of A writes it down to $150,000.  Now the security has a face value of $950,000 - less than when it was purchased.  B of A has exactly the same amount of money it started with. It's not having to give back any fees or profits.

            Alabama public employees retirement fund is still able to sue B of A for fraud, but they are loosing their money without a court hearing, and have to sue to get it back.

            We'd all be better off if the Feds just gave each person in America $10,000 cash, requiring all those with mortgage debts to pre-pay their mortgages.  Then all of us would fund this bail out through taxes, spreading the misery evenly,  instead of retiring teachers and firemen going without.

          •  The money is NOT going to the injured parties (3+ / 0-)
            Recommended by:
            timethief, TimmyB, FarWestGirl

            Only a small percentage of the agreement is in hard money and the remainder is coming in the form of credits from FUTURE modifications.

            The people getting the shaft are homeowners who HAVE ALREADY been illegally foreclosed upon who are getting about 2K apiece as compensation.

            I think there is a lot of good in the settlement for homeowners who still have roofs over their heads.

            BUT, the settlement did very little to punish the banks and servicers for crimes already committed and to compensate the victims of those crimes.

            Justice and the courts by their very nature are backward looking and PUNITIVE. Instead, this settlement is all forward looking, Kumbaya, let's let bygones be bygones, and turn the page. The President actually used the phrase "turn the page".  

            In my opinion, this settlement had very little to do with actual "justice" as I traditionally think of that phrase.

            If everyone else wants to think that an itsy bitsy  loss of profits made through the illegal practices and that an itsy bitsy compensation to the victims is "just" and that either or both will be sufficient to curb similar practices in the future, I have to disagree. If anything, this particular settlement let the perps get away with the financial equivalent of murder with a punishment more appropriate for jaywalking.

            “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

            by Phoebe Loosinhouse on Fri Feb 10, 2012 at 09:30:10 AM PST

            [ Parent ]

            •  Only if what they did was (2+ / 0-)
              Recommended by:
              Fogiv, ericlewis0

              criminal at the time they did it.  That's what keeps getting lost in the noise and fury.  Very little of what they did was illegal at the time.  Why?  Because Congress made the rules the banks wanted made.  We can be pissed about that, but that doesn't change reality.  Getting anything from the banks at all is really remarkable.  And no, there will never be fairness in any of this for the people who ended up in foreclosure.  

              I'm hoping that the near-complete collapse of our system ends up making all of us smarter consumers and smarter voters.  There is some personal responsibility here that needs to be taken as well.  People who bought homes they could barely afford when things were rosy made bad decisions.  

              I've made exactly the same kinds of bad decisions, and the consequences taught me to live differently.  I'd love to live in a spacious place with central heat and central air.  I'd love to take a shower in the winter without having to get that space heater going an hour ahead of time.  I'd like to sit on a warm toilet seat some mornings.  I'd love to have a dining room table that doesn't serve as my desk, the stand for the 9" TV, the sewing table, the junk I need table.  I could have a lot of that if I was willing to take the chance that my income won't suddenly drop, leaving me with a rent payment I can't make and a lease I can't fulfill.  I can't bear the thought of reliving 2002 - 2004 again so I live within my means, no credit, no debt.  

              I'm not looking for a love that will lift me up and carry me away. A love that will stroll alongside and make a few amusing comments will suffice.

              by I love OCD on Fri Feb 10, 2012 at 10:58:50 AM PST

              [ Parent ]

              •  Sorry, robosigning's fraud and that IS criminal N/ (0+ / 0-)

                Information is abundant, wisdom is scarce. The Druid

                by FarWestGirl on Fri Feb 10, 2012 at 11:51:46 AM PST

                [ Parent ]

                •  My understanding is that robosigning (1+ / 0-)
                  Recommended by:
                  ericlewis0

                  by the shadow banks coudn;t be prosecuted because they were unregulated and there was no oversight.  And most of the robosigning took place in the shadow banking area.

                  I could be wrong, it's a complex issue and I may have misread this.

                  Aren't there already some prosecutions against banks robosigning?  This agreement didn't prevent criminal investigations and is, in fact, channeling money into expanding them.

                  I'm not looking for a love that will lift me up and carry me away. A love that will stroll alongside and make a few amusing comments will suffice.

                  by I love OCD on Fri Feb 10, 2012 at 02:06:28 PM PST

                  [ Parent ]

                  •  My understanding is that the papers they were (0+ / 0-)

                    signing were affidavits stating that they had personally reviewed and checked all the other paperwork and that signing them without having done so was perjury. That's what I gathered, anyway.

                    Information is abundant, wisdom is scarce. The Druid

                    by FarWestGirl on Fri Feb 10, 2012 at 10:26:30 PM PST

                    [ Parent ]

                  •  Robosigning involved (0+ / 0-)

                    *Counterfeiting - creating or re-creating from whole cloth original mortgage documents and or notes and presenting them as original documents.

                    *forgery - signing another person's signature as your own

                    The excuse I have seen for the practice is that it is "surrogate signatures" which is perfectly legal because it was done with the internal permission and knowledge of the company doing the robosigning. That excuse doesn't address the fact that while the company may know internally the signature is faked, the court and the homeowner DON'T and it is being presented as the true signature of the person who is AUTHORIZED to sign. The faked signatures are in an extremely important part of the process that affirms that a QUALIFIED person has read and reviewed the file and asserts that the contents within are true.

                    In fact, an UNQUALIFIED person is making that representation, after NO REVIEW, and presenting the file to the courts. To me, simple layperson that I am, this seems like forgery because the intent is to deceive the persons outside the company, the people within are moot. It also seems like a perjury to the court and it also seems like filing false affidavits.

                    Notary fraud - the corrupted counterfeited forged perjured files noted above are then signed by a non-notary using the notary stamp issued to another. The notary is attesting that the name on the file is the person signing when we already know that isn't the case.

                    We haven't even addressed the contents of the file itself which may be filled with bogus and inflated fees, often derived from misapplied payments.

                    The apologist cover phrase for robo-signing is "sloppy paperwork".  It's sloppy paperwork in the same sense as a  misspelled robbery note.

                    This "sloppy paperwork" is part of the due process of an American homeowner losing their most precious possession - their house. Do we not all have the right to expect that if we do lose our homes to foreclosure that it won't be because of counterfeited documents, forged signatures, false affidavits and incompetent or malicious accounting?

                    I won't even attempt to get into what robosigning and foreclosure fraud does to the chain of title.

                    Anyway, there are plenty of easily recognizable crimes in robosigning. Unregulated "shadow banking" has nothing to do with it.

                    “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

                    by Phoebe Loosinhouse on Sat Feb 11, 2012 at 04:17:05 AM PST

                    [ Parent ]

        •  I don't think we can make all the victims whole (13+ / 0-)

          When the financial system collapsed nearly half the world's wealth was vaporized. It's gone.

          My impression is that they've been doing everything they can to recapitalize the banks and have done so to a certain degree. Still, if we had a magic wand and could unravel all the derivatives, I strongly suspect at least 2 or 3 of the big banks would be insolvent. I also suspect they haven't been trying to do that because as soon as it became clear that any big bank was going to take a major hit, the system would collapse again.

          Simon Johnson's The Quiet Coup still sounds to be an accurate appraisal and way forward to me:
          http://www.theatlantic.com/...
           

          Others have simply gotten old. I prefer to think I've been tempered by time.

          by Just Bob on Fri Feb 10, 2012 at 12:44:41 AM PST

          [ Parent ]

          •  though, the criticism can be raised, that... (11+ / 0-)

            .... Obama should have just declared a national emergency and seized the TBTFs, sent in the FBI and SEC bearing search warrants, nationalized them, and perp-walked their masters into federal court on felony charges.  

            What he actually did, was "stabilize the patient and transport to hospital."  That prevented an even bigger crash than some of the alternatives, but none the less, stronger measures would have been satisfying.

            "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

            by G2geek on Fri Feb 10, 2012 at 01:32:52 AM PST

            [ Parent ]

            •  Is there any actual legal authority (2+ / 0-)
              Recommended by:
              Geekesque, foufou

              for what you suggest? I'm doubtful.

              •  know what? do it anyway and let the... (0+ / 0-)

                .... stinkypoo Republicans try to impeach him.

                At minimum there's legal authority to send in the FBI and SEC with handfuls of warrants for every piece of paper and digital storage device in Goldman and the rest of them.

                Then come the robo-signing shops, with enough counts of felony fraud to start an economic stimulus just on building the federal prison cells to house the bastards.

                Now what we have is the spectacle of the financial industry all lined up at the police station to get fingerprinted like common crooks, and you'd better believe that the public would be ready for nationalizations and other forms of seizures.  Hell, use the asset forfeiture statutes, or RICO.

                Where there's a will, there are plenty of ways.  

                But Obama chose to take the quiet route and prevent an economic convulsion, which may in the long run turn out to be better, despite depriving all of us of the schadenfreude spectacle of seeing Lord Bankfiend and his ilk marched into court in orange jumpsuits while protesters shout "Firing squad!" and "Electric chair!" from the sidelines.  

                Comes the second term, we'll see.  

                Or the stay-homes, NOTVs, and useful idiots will end up not-voting the election into Romneyville, and A Handmaid's Tale will dawn upon our shores, as we lurch like Thorazine-sedated schizophrenics into the 21st century of our worst nightmares.  

                "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

                by G2geek on Fri Feb 10, 2012 at 07:27:03 AM PST

                [ Parent ]

            •  This has been underappreciated, imo...... (12+ / 0-)
              What he actually did, was "stabilize the patient and transport to hospital."  That prevented an even bigger crash than some of the alternatives, but none the less, stronger measures would have been satisfying.
              The whole first year or two of Obama's term has been necessarily about this.  Stabilization.  Without this accomplished, forget Progressive goals, we'd still be grinding through the depths of a deep depression.

              That he got the ACA throgh in those circumstances in nothing short of amazing.

              So now that the patient is stabilized and ready to leave the hospital, it's time to get moving forward.  And the system's stabile enough to go after some bad guys, too, without bringing the whole thing down.

              I'm expecting lots of good progress over the next 5 years.

              •  me too, or pie in the face, but i'll take the risk (3+ / 0-)

                I have a sneaking suspicion that Obama will discover his inner progressive and his inner warrior, and go into battle for us in his second term.  Just an intuitive hint, which may turn out to be completely wrong, but none the less.

                OTOH, my crystal ball tends to work pretty well.  This morning's mundane precognition was a quick visual image, almost dreamlike, of a cliff or embankment with rocks brought down by some blasting on a highway project.  I was even going to post it as a random comment because it had that vibe of "nonlocal information" and I wanted to document it.  Lo & behold, a half hour later I heard the actual news of an actual rockslide into a nearby highway causing a traffic delay.  If I could find a picture it would probably look pretty well like what I saw.   Precog capabilities plus logical inference add up to predictions that fairly often are close enough.  So I'll stick my neck out.  

                In any case I'd rather take the risk that Obama will stick to his moderate thing, than take the risk that we'll end up with some whackadoodle plutocrat or theocrat who will render another bookshelf full of dystopian novels obsolete.  You don't even want to know what I see down that trail.

                "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

                by G2geek on Fri Feb 10, 2012 at 07:39:43 AM PST

                [ Parent ]

          •  What that tells us is that the "wealth" (28+ / 0-)

            was not reality-based to begin with.  It was a figment of the imagination.

            Whether a house is "worth" $450,000 or $150,000 makes little difference, as long as the house is still sitting on the ground and the owner has whatever is required to keep it.
            As it happens, the $150,000 is more realistic because that's about what it cost to build those McMansions.  The rest of the "value" in the $450,000 price tag was made up of realtor's and developer's and appraiser's pipe dreams.  Can the dollars they pocketed be gotten back?  No.  Most of it has already been spent.  Besides, people are going to have to be content knowing that about 90% of those "professionals" are now unemployed and, because most of them were independent contractors, there's no unemployment insurance for them.

            People to Wall Street: "LET OUR MONEY GO"

            by hannah on Fri Feb 10, 2012 at 03:02:43 AM PST

            [ Parent ]

            •  Great comment, hannah. The points you make get to (10+ / 0-)

              the heart of how/where this housing mess started.

              As it happens, the $150,000 is more realistic because that's about what it cost to build those McMansions.  The rest of the "value" in the $450,000 price tag was made up of realtor's and developer's and appraiser's pipe dreams.
              This point doesn't get made nearly often enough. And when I read/hear about "housing prices needing to come back up" it maked me want to pull my hair out. That just puts us right back where we were.

              People have got  to stop being willing to pay over inflated prices for homes. The realator, developers, and bankers were only able to do what they did because buyers let them. I don't have a lot of sympathy for people whose mortgages are underwater if it was a case of wanting a big fancy house and they were willing to pay through the nose to get it. Shame on them for not walking away and looking for something realistically priced that they could comfortably afford.

              For instance, in the neighborhood adjacent to downtown Rockville, MD, houses would go on the market and on the first day there'd be bidding wars. For anyone who won those wars and is now stuck with a home for which they paid too much, I just don't feel sorry for them.

              And there is a huge difference between those folks and the folks who were preyed upon by realators and lenders who took advantage of their naivte.

              Ds see human suffering and wonder what they can do to relieve it. Rs see human suffering and wonder how they can profit from it.

              by JTinDC on Fri Feb 10, 2012 at 05:03:13 AM PST

              [ Parent ]

              •  And there are also the people who (12+ / 0-)

                allowed their names to be used to "buy" numerous houses in which they never intended to live so the realtors and mortgage brokers and all the other middlemen could collect their fees. Some of those people have actually been prosecuted and sent to jail. The DoJ reports on the cases, but the local media, if they provide coverage only do it once or twice.
                There was fraud and it didn't all happen on Wall Street.

                People to Wall Street: "LET OUR MONEY GO"

                by hannah on Fri Feb 10, 2012 at 05:30:57 AM PST

                [ Parent ]

                •  And this area of mortgage fraud committed by (9+ / 0-)

                  small players is where the Justice Department and the FBI have chosen to focus their energies to date and yes, people have actually gone to jail. They focused on crimes where the bank was the victim, not the reverse, where the banks and servicers were the perps.

                  All well and good, but it doesn't address the systemic crimes of the big boys who used robosigning (counterfeiting, forgery, fraud and perjury) and servicer abuse to steal houses which affected far greater numbers of people.

                  If you lied to the bank, they will get you. If the bank lies to you (or the courts) no problem.

                  “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

                  by Phoebe Loosinhouse on Fri Feb 10, 2012 at 05:42:00 AM PST

                  [ Parent ]

                  •  Banks learned a long time ago to (22+ / 0-)

                    keep their records secret.  Without documentary evidence, it's very hard to make a case.  
                    The way I discovered land speculators were flipping lots via multiple bogus sales to each other so they could then get a mortgage for the inflated amount was quite by chance in flipping through deed books at random and seeing that the same people were "selling" the same parcel within a couple of pages.  I sent the information to the supervisory agency (don't remember which--it was in about 1980) and an investigator showed up at my house to collect the data and a couple of years later an S&L was closed down.
                    I never heard another word until a banker from another institution asked me why I'd "gone after" the S&L.  I told him it was because they were refusing to make loans to home owners in the inner city and giving money to land speculators. Some malfeasance got nipped in the bud, but it was just a matter of chance and one person liking to look through deed books.
                    I suspect that one of the reasons for setting up MERS was to avoid the kind of snooping I did.  All the electronic records are inaccessible and so easily "lost." The counties getting their recording fees back is going to be a big success, if they ever manage it.
                    Nobody likes paper-work because a written record is hard to falsify.  The robosigners demonstrated that.  But, it took some judges actually looking at the paperwork.

                    People to Wall Street: "LET OUR MONEY GO"

                    by hannah on Fri Feb 10, 2012 at 06:02:19 AM PST

                    [ Parent ]

                  •  Sorry, no (9+ / 0-)

                    That's not what happened:

                    All well and good, but it doesn't address the systemic crimes of the big boys who used robosigning (counterfeiting, forgery, fraud and perjury) and servicer abuse to steal houses which affected far greater numbers of people.
                    Not a very smart crime if you try to steal houses that are worth less than your loan, and you can't find a buyer to get it off your hands anyway.

                    The robosigning abuses were primarily to deal with the problem of sloppy paperwork and record keeping. Yes, some people who were not supposed to be foreclosed on got foreclosed on, and that's a genuine problem. But most of the people who were foreclosed on were genuinely in default.

                    The real crooks aren't the buyers, sellers or even the originating lenders. It's the big boys at the investment banking firms who ginned up the market for this whole mess. As long as Wall Street investment banking firms kept packaging pooled loan investments and selling them to gullible nvestors, mortgage lenders kept creating "product" to sell them, no matter what crap they had to put in the grinder.

                    •  Well said (2+ / 0-)

                      Also remember the ratings agencies that legitimized the whole thing.

                      I'm not liberal. I'm actually just anti-evil, OK? - Elon James White

                      by Satya1 on Fri Feb 10, 2012 at 07:13:16 AM PST

                      [ Parent ]

                    •  True or false - (2+ / 0-)
                      Recommended by:
                      highacidity, Geekesque

                      The big boys' schemes would not have been possible without overinflated real estate prices. Or was overinflating real estate prices instigated by the big boys? I've been under the impression that the big boys simply saw what the realators and lenders were doing and said to themselves, "hey, here's an idea..".

                      Ds see human suffering and wonder what they can do to relieve it. Rs see human suffering and wonder how they can profit from it.

                      by JTinDC on Fri Feb 10, 2012 at 07:15:43 AM PST

                      [ Parent ]

                      •  All part of a vicious cycle. eom (1+ / 0-)
                        Recommended by:
                        JTinDC

                        "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

                        by Geekesque on Fri Feb 10, 2012 at 10:17:48 AM PST

                        [ Parent ]

                      •  I think you have it kind of backward (4+ / 0-)

                        I think a virtually insatiable market for pooled mortgage bonds was created by the investment bankers. They sold the investments as essentially riskless because of the pooled nature.

                        This created a demand for mortgages to go into the pools. Banks relaxed their lending standards when it became clear that the investment pools didn't care too much about the individual risk of default. And the originating bank made fees, but got to pass off the risk. What's not to love?

                        It became much easier to borrow money to buy a house. More people started doing it. This increased demand for houses.

                        And guess what? When demand for housing goes up, so do prices.

                        As real estate prices soared, at the other end of the spectrum the investment bankers reasoned that they could include even dicier mortgages in the underlying pool. After all, even if the default rate when higher than expected, losses would be covered by the increase in property value.

                        We all know the flaw in this reasoning far too well now.

                        •  Gotchya. Thanks for explaining. Makes sense. (1+ / 0-)
                          Recommended by:
                          elmo

                          Ds see human suffering and wonder what they can do to relieve it. Rs see human suffering and wonder how they can profit from it.

                          by JTinDC on Fri Feb 10, 2012 at 10:59:10 AM PST

                          [ Parent ]

                          •  Yeah, in a weird kind of way (0+ / 0-)

                            it does. The only problem was what happens if enough underlying mortgages start to default. Then real estate prices can start deflating, and the party is really over very fast. Which of course is exactly what happened.

                    •  Some investors were gullible, others (1+ / 0-)
                      Recommended by:
                      virginislandsguy

                      wereothers were greedy and chasing high yields.  They drove the problem as much as anyone.  Wall Street didn't sell stuff that didn't have buyers.

                      "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

                      by Geekesque on Fri Feb 10, 2012 at 10:17:02 AM PST

                      [ Parent ]

                      •  But Wall Street loves to create "products" (1+ / 0-)
                        Recommended by:
                        Geekesque

                        to sell, even ones that don't actually make financial sense. Have you ever read the book "Liar's Poker?" It explains this phenomenom very well.

                        I used to practice public finance law in the 80's and early '90's. Investment bankers were always buzzing around our public finance clients like flies on you-know-what, trying to entice them with new investment structures.

                        Investment banks make money from fees when they convince a client to close a deal, and they also make money on the other end when they convince their investment clients to buy the deal.

                        Do they care if it makes financial sense for either side? Well, no. They care if it makes money for themselves.

                        •  This wasn't driven by investment banking (0+ / 0-)

                          though--it was fixed income/structured credit deals.

                          Wall Street was plenty guilty of many sins.  But the people/investment advisors who sought and/or demanded 7% annual returns on supposedly AAA investments played a part.  Certainly no responsible pension fund should have been buying RMBS CDO equity tranches, but some did.

                          "[R]ather high-minded, if not a bit self-referential"--The Washington Post.

                          by Geekesque on Fri Feb 10, 2012 at 08:22:16 PM PST

                          [ Parent ]

            •  This 'wealth' is our retirement funds (2+ / 0-)
              Recommended by:
              hannah, ericlewis0

              Most of this wealth that vanishes comes right out of the pockets of anyone who has a pension fund through their work.  

              The people who got rich out of run up in housing have their money in cash.  The retirement fund invested by both public and private companies own these mortgages that are being written down.

              I don't think there is much anyone can do about this, but it's not a win for us.

              •  In '92 or '93, Greenspan justified (1+ / 0-)
                Recommended by:
                ericlewis0

                lowering the capital gains tax and then removing from sales of home entirely in order to "liberate the equity Americans had in their homes for the market".
                This was not too long after the debacle of churning housing lots by the S&L had finally been cleared up.

                Speculating with other people's money and assets has no down side, if the speculators are bereft of ethics and Profit is the only measure.  It used to be that one managed other people's money with more care and caution than one's own. It was a matter of honor.  No longer.
                It's no longer true of our stewards in Congress either.

                People to Wall Street: "LET OUR MONEY GO"

                by hannah on Fri Feb 10, 2012 at 09:46:39 AM PST

                [ Parent ]

              •  That's where the class action suits matter (6+ / 0-)

                There are already some of these in the works -- pension funds (especially public employee pension funds) suing the banks and investment banks for securities fraud, for lying about the quality of the mortgages that were bundled up into those CDOs, when the banks either knew or deliberately turned a blind eye to how much fraud there was all through the system and to the looming defaults. (In other words, "You told me I was buying an Audi, but really it was a rusty old jalopy, and you knew it.") If those suits are successful, Goldman Sachs and all those folks will have to cough up a mint to pay the pension funds -- which is good for taxpayers (for the public employee funds) and for retirees.

                That's why it's so important that the federal settlement does NOT prevent these lawsuits from going forward.

        •  and criminal prosecutions (6+ / 0-)

          have note been ruled out.   Just a federal  investigation ended on five banks for a limited number of years on one tip of the iceberg problem.   It is one huge ugly iceberg.   Most of it remains below the surface and needs to be brought into the sunshine to melt.

          Too many people in my opinion have painted this problem as a monolith, one inseparable whole.   There are different agencies, different laws and regulations, criminal vs. civil, public vs private, homeowners vs. banks, investors vs. banks, dirt law, securities law, federal claims, state claims.   Each need to be addressed and we may have dozens more settlements or trials of cases such as Schneiderman's,  more cases by homeowners, and we see very little of what is playing out with the big investors.    This settlement isn't an 'all is forgiven, go forth and sin no more' end to the entire mortgage debacle.

          And in the end, the real solution is still unfortunately political.   People have to get the money out of politics so that the government once again has realistic regulations on these entities, criminal aspects with real teeth.   The time to fix a problem like a securities bubble is before it starts.  Anything else will ALWAYS be too little, too late.  

      •  Schneiderman said criminal investigations (14+ / 0-)

        are continuing and I am also cautiously optimistic about this.

        So you may yet get your perp walk of a CEO, but my cynical side is still... well lets just say a "Marth Stewart" scape goat just won't do.

        I'm hopeful but in wait and see mode.

      •  This.... (21+ / 0-)
        What do we really care about, revenge or justice?
        I don't want anyone's head on a pike. I want the American justice system to work.

        I think this might very well be the beginning of a series of legal skirmishes with the banking/mortgage industry that are going to slowly cripple their ability to simply lobby their way out of any trouble. Nobody outside of the Beltway has any sympathy for these assholes, and it's going to be way harder for them to fight 50 attorney generals and the U.S. Department of Justice than it is for them to quietly lobby the Senate Banking committee to kill legislation. Most federal and state judges don't give a fuck about their campaign money. When the banks run the Federal legislative branch, you use the states and the executive/judicial branches to pursue reform.

        •  yes, during the settlement talks (3+ / 0-)

          there was the Reuters article that started to talk about that, but that part was later edited out I think, that they had fought for exactly that:

          to quietly lobby the Senate Banking committee to kill legislation.
          So I think that was added during settlement negotiations as a result of pressure from, the article said 'the left' but of course also the AG's who stood up.
            The article's timing was that of a trial balloon last week.
            It must have been pretty hectic.

          From those who live like leeches on the people's lives, We must take back our land again, America!...Langston Hughes

          by KenBee on Thu Feb 09, 2012 at 10:25:54 PM PST

          [ Parent ]

        •  This I Think Is The Most Critical Part: (2+ / 0-)
          Recommended by:
          ericlewis0, CuriousBoston

          It will not "(r)elease any private claims by individuals or any class action claims".

          Private parties can hold the banks responsible to them individually through merely hiring a lawyer to file meritorious cases under state law. They won't have to depend on the state AGs, or the feds, to hold the banks accountable. And neither would we.

          Never underestimate the fertile mind and skills of a good private lawyer. My fear has always been that this settlement would close the courthouse doors, as others have and this one clearly does not. However, the settlement should have extracted a lot more coin from the banksters.

          "I never met a man I didn't like." Will Rogers - American Redneck

          by chuco35 on Fri Feb 10, 2012 at 09:47:43 AM PST

          [ Parent ]

        •  They made Washington look (0+ / 0-)

          foolish. I wonder if that is a motivating force? For two decades every "practical" and "sensible" person believed that A) Alan Greenspan was a wise messiah who understood everything about the economy and B)Financial giants like Merril and Goldman were sober, respectable companies staffed with financial geniuses.
          These beliefs led directly to C)"Well, if Greenspan says not regulating derivatives is the best choice, he must be right. We should also lower the capital reserve requirements and allow investment companies to merge with banks."

          Now they know they were played for suckers.

          "YOPP!" --Horton Hears a Who

          by Reepicheep on Fri Feb 10, 2012 at 09:53:27 AM PST

          [ Parent ]

      •  how about some real help? (11+ / 0-)

        HAMP did nothing for me though I appeared to be eligible, this deal does not even include people like me because my lender is not part of the settlement. Yet the townhome I still owe $140.000 on is now worth $73,000, and due to a number of other unexpected circumstances, my monthly payment is about half of my take home pay.

        -7.75, -6.05 And these wars; they can't be won Does anyone know or care how they begun?-Matt Bellamy

        by nicolemm on Thu Feb 09, 2012 at 09:38:54 PM PST

        [ Parent ]

        •  You should check with your state (7+ / 0-)

          They're going to provide different things in different states, but as Schneiderman said above, there will be counseling and legal help available to homeowners in trouble and they will help appeal to the banks to get underwater homes mortgages rewritten.
          I was surprised to hear that Kansas is getting $50 million from this, our state is one of the few that the bubble and then the foreclosure crisis barely touched.
          I imagine states really badly hit like Florida and Nevada will get the lion's share, but investigations and prosecutions will go on:

          The hard line against banks, laid out by President Obama during a briefing Thursday, is a marked shift from just a few months ago. Most of the government's criminal prosecutions against financial executives had fizzled out and a growing number of bank critics were complaining Wall Street was getting off too easy.

          Banks also lost out on their attempts during negotiations to be given immunity from future investigations on a broad number of issues related to the mortgage meltdown. New York, California and several other states complained about the banks seeking leniency, and the immunity was narrowed considerably in the final settlement.

          "It does not release the group for a host of remaining liabilities," Nomura Securities bank analyst Glenn Schorr wrote Thursday.

          http://www.latimes.com/...

          If you can separate sex from procreation, you have given women the ability to participate in society on an equal basis with men. -Gloria Feldt

          by skohayes on Fri Feb 10, 2012 at 05:15:01 AM PST

          [ Parent ]

    •  you are not helpful with these comments (0+ / 0-)

      but you don't care, do you?

      Donate to Occupy Wall Street here: http://nycga.cc/donate/

      by BlueDragon on Fri Feb 10, 2012 at 07:11:17 AM PST

      [ Parent ]

      •  Yes, I care (3+ / 0-)
        Recommended by:
        TheLizardKing, Diogenes2008, Loge

        I care that some progressives on this site turned on Elizabeth Warren at the drop of a hat, simply because she did one thing they disagree with.

        You never trust a millionaire/Quoting the sermon on the mount/I used to think I was not like them/But I'm beginning to have my doubts -- The Arcade Fire

        by tomjones on Fri Feb 10, 2012 at 07:30:48 AM PST

        [ Parent ]

    •  Warren's Weak Support Isn't Something to Crow (0+ / 0-)

      about.  You should pay attention to this part:

      But it needs to be the beginning, not the end, of efforts to hold the big banks accountable with meaningful penalties that demonstrate the rules and the law apply to everyone, no matter who your friends are or how many lobbyists and lawyers you can hire. Moving forward, further investigation and prosecution are needed to bring our long national mortgage nightmare to an end.
      Given how little the Obama Administration has done during the last three years to go after the bankers, I have very little hope that this is the beginning of a full scale attempt to bring the banks to justice.

       

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