For people who care and have been following the perambulations of the Foreclosure fraud settlement being worked out with the banks over robo-signing, etc. here are the comments and insights of the people I follow and who consistently are more in depth and on top of things than anything you'll find from the MSM.
All 3 are in agreement that the banks give up very little and consumers will get very little from this settlement as currently being described.
First up is Adam Levitin from Credit Slips. It's good to start with him because both Dayan and Smith refer to his article in their subsequent commentary.
The Sweep It Under the Rug Housing Plan
It's also time that we recognize that negative equity didn't just appear by itself. This wasn't a freak weather event. It was a man-made disaster. We ended up with negative equity because of a housing bubble inflated by very deliberate acts by a limited number of financial institutions that profitted greatly from bloating the economy with cheap and unsustainable mortgage financing. We witnessed a macro-economic crime and are living with the consequences of it.
David Dayen from Firedoglake
Levitin Crystallizes AG Settlement Travesty
The negative equity on mortgages actually acts as a bank subsidy at this point. If it weren’t for the negative equity, mortgage holders would refinance, costing the banks substantial amounts of money because rates are so low. So banks benefit from negative equity, even if they don’t benefit from the sluggish economy that accompanies it. It’s short-term versus long-term thinking.
And this negative equity is a direct result of financial institutions engaging in a pump-and-dump scheme, getting rich while selling anyone a loan and using government protection to insulate them from the fallout. As Levitin says, if they broke it, they ought to buy it:
Next, Yves Smith at naked capitalism
Latest Attorney General Bailout Plan: Give Banks a GetOut Of Jail Free Card In Exchange For a Few Re-Fis
So the banks know that the AGs are carrying a gun loaded with blanks. They also know the AGs have painted themselves in a corner: they’ve floated trial balloons of settlements of $20 billion or more. The banks won’t agree to that for just robosigning, so the only way a deal gets done is for a juicy enough “get out of liability free” card. And that means a release for things the AGs never investigated and have no idea how bad the rot is. As Biden put it, it’s like having a contractor admit he screwed up on the gutters and agreeing to pay for the damage related to a resulting leak you had, then offer to give you 10% more if you sign away your rights to sue him over the roof or the foundation. Would any person with an operating brain cell do that? Answer: only AGs who were never going to go after the banks anyhow.
Upon reading these guys you will discover that the big deal that is a little deal is some re-fis for homeowners that are current on their mortgages but who have negative equity BUT it only applies to homeowners whose mortgages haven't been securitized.
After all the analysis is said and done , the numbers of homeowners this action will actually relieve will be a relatively small number. Does that remind anyone of anything? Like HAMP?
As Yves Smith points out, this was a toothless endeavor on the part of the AGs anyway because they never even initiated document discovery. You can't even use the word "investigation" in this matter because there simply never was one.
Sad stuff for homeowners and taxpayers who were looking to their state AGs and/or the DOJ to do their jobs and investigate and prosecute wrongdoing.
All 3 are in agreement that basically the housing crisis will never go away until someone somewhere has the guts to deal with the elephant in the room NEGATIVE EQUITY and figures out who is going to take the haircut.