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Eric Schneiderman, the New York Attorney General who has been heroically trying to bring accountability to criminal banksters, and was just named by President Obama to lead some kind of mortgage fraud investigtion, just spoke to Rachel Maddow on her show (MSNBC).

He said today's action KEEPS EVERYTHING ON THE TABLE. All fraud currently being investigated will continue to be investigated and all manner of new charges can be discovered/brought.

He could not have been more emphatically psyched about today's multi-billion dollar deal. He said that primarily it will provide MILLIONS OF HOMEOWNERS RELIEF, and the big banks are in no less trouble as a result.

I will post the video the moment it becomes available.

I think this is important because there have been recent reclisted diaries that are like, "we're getting sold out, man!"  And I confess that twenty-something billion dollars sounds like an insultingly small crumb compared to the trillions stolen. But if Mr. Schneiderman thinks this deal is good, and is only a beginning, we might all do well to trust him. I know I do.

Please discuss this development in CityLightsLover's nightly Maddow post here:
http://www.dailykos.com/...

Also, tell her she shouldn't be mad at me for posting this before her AWESOME diary went up. Let her know what an intelligent, witty, gorgeous and beloved Kosack she is! But don't overdo it or she'll know something's up. ;D

UPDATE:
Here's the video:

Visit msnbc.com for breaking news, world news, and news about the economy

UPDATE 2:

(h/t tomjones) Here is Elizabeth Warren's positive response to the deal as it appeared in the Washington Post today:

Elizabeth Warren, Democratic candidate for Senate in Massachusetts (news statement):

“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.”

http://www.washingtonpost.com/...

UPDATE 3:

Kosack RhodaA not only has a list of the good elements of the deal from a diary she posted yesterday...

Specifically, this settlement does not:

Release any criminal liability or grant any criminal immunity.

Release any private claims by individuals or any class action claims.

Release claims related to the securitization of mortgage backed securities that were at the heart of the financial crisis.

Release claims against Mortgage Electronic Registration Systems or MERSCORP.

Release any claims by a state that chooses not to sign the settlement.

End state attorneys general investigations of Wall Street related to financial fraud or the financial crisis.

(h/t thenekkidtruth)

...but she also has the link to the official Govt. website of the agreement, where all its details can be perused:
http://www.nationalmortgagesettlement.com/...

Originally posted to Animal Nuz on Thu Feb 09, 2012 at 07:17 PM PST.

Also republished by Friends of Keith Olbermann and Rachel Maddow.

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  •  Tip Jar (266+ / 0-)
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    I ♥ President Barack Obama.

    by ericlewis0 on Thu Feb 09, 2012 at 07:17:57 PM PST

  •  I'm glad to read this. I just heard about the deal (29+ / 0-)

    and I heard Kamala Harris talking about it. I know she held out for more than some of the other states were willing to settle for, and she was happy. But still, part of me feels ANY settlement is a concern.

    Poverty = politics.

    by Renee on Thu Feb 09, 2012 at 07:30:51 PM PST

    •  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.

         

  •  Wow... (18+ / 0-)

    Do I need to find my hip boots? It's getting a little deep here! ;D

    To the GOBP re Role of Goverment, "If You Don't Value It, You Shouldn't be Trusted With It" - Rachel Maddow

    by CityLightsLover on Thu Feb 09, 2012 at 07:37:08 PM PST

  •  Ha, good luck! (37+ / 0-)

    I posted a comment earlier about how Elizabeth Warren had good things to say about the settlement and...people were attacking Elizabeth Warren!

    When progressives invest in a storyline, they stick with it.

    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 07:43:07 PM PST

  •  May be fine wrt to the mortgage (15+ / 0-)

    fraud. Not that I expect the ones most egregiously victimized to be fairly compensated.

    However, it doesn't begin to address the larger problem:

    From 2000 to 2008 mortgage debt rose from $6.9 trillion to $14.6 trillion, an increase of 110%.
    A goodly chunk of the new mortgage debt was based on phantom values but sellers still got the cash.
    •  And it was "legal", and people (22+ / 0-)

      agreed to pay higher prices hoping to cash in in a few years. It's all a crap shoot, isn't it? There's the common wisdom that housing is your safest investment and always pays off, and then there's the shadow banking industry, unregulated and invisible, creating an unsustainable bubble.

      Let's hope we're sadder but wiser in the future.

      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 08:07:35 PM PST

      [ Parent ]

      •  I think we have returned to the old common wisdom (15+ / 0-)

        A home isn't an investment. It's where you live.

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

        by Just Bob on Fri Feb 10, 2012 at 01:06:02 AM PST

        [ Parent ]

        •  And that's really the bottom line. (8+ / 0-)

          A home is not something you put money into expecting a good return.  They tend to hold their value and gain a little over the long run, but you'd be better off putting your money in big, dividend-paying stocks.

          It's not an investment.  It's a big, organized pile of rock, metal and wood that sits in the rain and rots so that you don't have to.

          It can be a rational choice to buy instead of rent -- and the math isn't terribly difficult if you do a little research -- but, alas, most people get that equation wrong, and most got it wrong spectacularly so over the last decade.

          Be nice to America. Or we'll bring democracy to your country.

          by Drew J Jones on Fri Feb 10, 2012 at 03:34:21 AM PST

          [ Parent ]

          •  I think the volatility of the (1+ / 0-)
            Recommended by:
            Just Bob

            housing market fooled a lot of people.  My first husband and I bought a house in 1973 for $30,000.  I stripped and refinished all the woodwork, pulled out all the carpet and shined up those hardwood floors and painted or wallpapered every inch of that place.  We sold it in 1978 for $140,000.  I'd love to take credit for that radical leap in value, but I could read and I knew the housing market was insane.  We kept benefiting, too.  We were lucky.  He bought down in 2003 in order to make retirement less of a financial crapshoot, so he was lucky again.

            We could easily have been on the foreclosure end of the market if we'd been playing real estate in the last few years.  Again, lucky.

            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 05:32:25 PM PST

            [ Parent ]

      •  Every major (2+ / 0-)

        financial pundit told us to do two things: put everything we had into our 401ks, and use refinancing to consolidate high interest debt. This was the wise and sensible course of action. I don't remember a single dissenter pointing out that both of these strategies made the assumption that both the stock market and the housing market would continue to "grow."

        Now we know we were played.

        "YOPP!" --Horton Hears a Who

        by Reepicheep on Fri Feb 10, 2012 at 10:00:28 AM PST

        [ Parent ]

        •  And they all benefitted hugely from those (0+ / 0-)

          who followed their advice I'm betting.

          If you remember that Wall Street is Las Vegas in elegant shades of grey you're going to be okay.  Unless you think Las Vegas plays fair, then you're in shit to your armpits.

          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 05:24:55 PM PST

          [ Parent ]

    •  Sellers still get the cash, as everyone who (2+ / 0-)
      Recommended by:
      Creosote, cslewis

      can continue to make payments under the phantom values created by the initial fraudulent loans are paying much more than they would be if those loans hadn't driven bidding up in the first place.

      It's the silent crime, and it's still ongoing.

       


      Today, if you exist... that's already suspicious.

      by Jim P on Fri Feb 10, 2012 at 01:08:13 AM PST

      [ Parent ]

      •  While I don't have much empathy for (0+ / 0-)

        all those entities that ponied up the cash that was used to finance the purchase of houses, they like the house purchasers were buyers not sellers.  The sellers and their accomplices were the prior owner or real estate developer, the real estate brokers, the appraisers, the mortgage brokers, the loan originators, the security loan packagers, and the ratings agencies.  Problem is that a whole lot of cash went to those folks and it is now all gone.

    •  Appraisers and Ratings Agencies (7+ / 0-)

      The most corrupt part of the mortgage bubble, apart from its bankster architects in the Credit Default Swap racket, was the appraisers and debt ratings agencies. Appraisers lied to wildly inflate home values, while debt ratings agencies lied to wildly inflate mortgage instrument values. The two reinforced each other in a feedback cycle that inflated the whole market. Each is supposed to be the point where the fraud is stopped; both accelerated the cycle.

      There are thousands of people in appraisal and ratings agencies who committed frauds personally in the $millions, and collectively in the $trillions. They should all be in jail.

      At the very least both industries should be completely reregulated.

      Instead they all walk free, continuing their crime spree. And only minimal, inadequate regulations are being passed.

      The banks rule the world.

      "When the going gets weird, the weird turn pro." - HST

      by DocGonzo on Fri Feb 10, 2012 at 05:05:17 AM PST

      [ Parent ]

      •  I'm not sure the appraisers did anything wrong. (0+ / 0-)

        If something sells for the inflated value, obviously your appraisal wasn't inflated, it merely reflected market value at the time.

        •  Sure they did (3+ / 0-)

          There is plenty of evidence of the banks telling the appraisers what number they needed to hit -- and if they didn't, the appraiser wouldn't get hired any more.

          Without faulty or fraudulent appraisals, there's no way the banks would have been lending 125% of the stated sales price -- "cash out" mortgages. And as the market began to tank, appraisers continued to use older comparables at least in some markets.

  •  interesting comment @ dealbreaker: (8+ / 0-)
    . If you came to me and were like “I will give you one gold star for every dollar that you take out of your wallet and light on fire, and I will also give you one gold star for every two dollars that you take out of Bess’s wallet and light on fire,” and I liked gold stars and had as my aim to accumulate a certain fixed number of them, say 17 gold stars, how many of my dollars would I light on fire, and how many of Bess’s dollars would I light on fire?

    If you said “zero of yours and 34 of Bess’s,” you would be right, as far as me. As far as banks you’d be … like, really close to right, no? The answer appears to be “$1 of their money and $31 of someone else’s,” give or take. That is terrible if the point of the mortgage settlement is to maximize the amount of pain suffered by the evil servicer banks that robo-signed all those robo-signatures. It is … well, optimal, actually, if the point of the mortgage settlement is to maximize the amount of benefit provided to underwater homeowners for a given supply of gold stars.

    http://dealbreaker.com/...
  •  I'm always fascinated by the (60+ / 0-)

    frenzy of "we've been sold out" immediately after this administration does something really great. I keep wondering if I fell into Red State by accident - if Obama did it, it's axiomatic that it's evil.

    It's like the Deficit-ceiling deal. Obama gets everything he wants and puts the Republicans face to face with massive defense cuts and cuts to Medicare providers (like hover-round and the prescription management folks), and people go batshit crazy without even reading the agreements, or seeing the long-term gain. It makes us look dumb.

    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 08:01:17 PM PST

  •  Thanks for the Schneiderman vid (7+ / 0-)

    The deal can't keep "everything on the table," though. Some stuff got taken off the table. That's why it was a deal.

    My understanding is that stuff was either civil cases re robosigning and servicing abuses or civil plus criminal (have heard both).

    An ambulance can only go so fast - Neil Young

    by mightymouse on Thu Feb 09, 2012 at 08:39:29 PM PST

    •  well...he was in charge of the deal (3+ / 0-)
      Recommended by:
      ericlewis0, mightymouse, Australian2

      so I would expect him to love it...wasn't he put in the lead of this during the SOTU?

      I haven't looked into the actual proposal...I just find the diary odd in the way it seems to imply the Schneiderman is a neutral observer?

      "But once John Boehner is sworn in as Speaker, then he’s going to have responsibilities to govern. You can’t just stand on the sidelines and be a bomb thrower." - President Obama, 12-07-2010

      by justmy2 on Thu Feb 09, 2012 at 08:46:10 PM PST

      [ Parent ]

      •  It appears that at least parts of two lawsuits (0+ / 0-)

        are removed from the table in the settlement, one in MA, one in NV iirc (per Yves).

        The second sentence of the diary is misleading. If Schneiderman really said this he is being misleading, which is quite disturbing.

        An ambulance can only go so fast - Neil Young

        by mightymouse on Fri Feb 10, 2012 at 06:08:09 AM PST

        [ Parent ]

        •  the more important part (5+ / 0-)

          of the MA suit stays on the table, the Ibanez claims that are the paramount weapon of the homeowner's defense, 'where's the note', stay.  So as to ongoing foreclosures, and stopping banks from fraudulently taking houses,  there is a large club left to the homeowners, and the state on behalf of homeowners.

          The dual tracking as a deceptive practice is gone with a half promise that a review of modification has to be done.  State deceptive practices claims generally don't yield big financial payoffs, mostly they are aimed at getting behavior changed.   I would rather have an Ibanez claim than a deceptive practices claim.

    •  I think it was civil, but not criminal. (11+ / 0-)

      Now strictly speaking, I would have loved to see the civil cases remain in the mix.

      But if this whole thing ends with homeowners being mostly compensated, and enough big perps going to prison as to have a deterrent effect for a while, that'll be a reasonable conclusion.

      "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 09:01:54 PM PST

      [ Parent ]

      •  I'm gonna take your house, (5+ / 0-)

        and give you $2k, and you'll be "compensated."

        The two things Teabaggers hate most are: being called racists; and black people.

        "It takes balls to execute an innocent man." -- anonymous GOP focus group member on Rick Perry

        by Punditus Maximus on Thu Feb 09, 2012 at 11:32:50 PM PST

        [ Parent ]

        •  More Redstate ... (16+ / 0-)

          ... oversimplification!  How's this:  "I'm not gonna take your house, here's $2,000.00, and you or your State's Attorney General can still sue me."  

          Republicans, like Zombies, just want to get a head.

          by Tortmaster on Fri Feb 10, 2012 at 01:07:29 AM PST

          [ Parent ]

          •  The 2K only goes to people who DID lose their home (7+ / 0-)

            So, that is indeed the total compensation offered to victims of robosigning in this settlement.

            2K for losing their homes in an illegal process. There are larger fines in my state for speeding. In an actual foreclosure, the banks will often pay out voluntarily 3K or more to get the homeowner out - "cash for keys" which just speaks to the point that this "penalty" is in the same category as a nuisance expense to the banks.

            No matter how you look at it, this penalty as assessed is laughable and an insult to the homeowners.

            I doubt very seriously than any of these victimized homeowners has the funds to pursue their own  individual cases against the banks in pursuit of real justice and a compensation commensurate for the crimes committed

            Crime pays.

            “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 03:28:57 AM PST

            [ Parent ]

            •  $2K to people that defaulted and would've been (10+ / 0-)

              foreclosed on in the normal course of business.  

              •  And those that defaulted in the ABNORMAL course (6+ / 0-)

                of business.

                I will post over and over and over again if I have to that a significant number of foreclosed homeowners were PUSHED into default by their servicers. Here is my now standard reply to all those who continually post the "it's just a bunch of deadbeats losing their homes" meme:

                It's called "servicer induced default". Google that phrase if you would like to educate yourself.

                In a nutshell:

                 homeowners who were CURRENT on their mortgages had misapplied payments, interest and penalties that they could never get corrected.

                Homeowners who were CURRENT on their mortgages had "forced placed insurance" that duplicated already existing insurance. Because the homeowner couldn't afford the bogus new expense, they were foreclosed on.

                Homeowners who were CURRENT on their mortgages but who were looking for a modification, were told by the servicers that they had to be delinquent in order to qualify for the modification. They TOLD homeowners to miss 2 payments! Too bad for the homeowner because then they were caught in a spiraling web of penalties, interest, bogus additional fees and expenses, etc. and were pushed into foreclosure.

                If your response is that these cases are rare and anecdotal, that is completely untrue. These cases were prevalent and widely reported to the authorities and to the courts. The fact that they were so prevalent is the reason for this settlement in the first place, paltry as it is.

                “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 04:50:42 AM PST

                [ Parent ]

                •  But isn't litigation still an option for them? (5+ / 0-)

                  That's my understanding. If the facts support the case you can still sue.

                  •  Yes, the wronged homeowner can still take on the (5+ / 0-)

                    banking entities that the government just rolled over for and sue them on their own if they really want an equitable compensation for the crimes they were subjected to.

                    Yes, you are right, that is still an option.

                    They and their now government funded Legal Aid attorney can take on the industry and attempt to do a better job than the entire Justice Department and all the State AGs.

                    Very comforting.

                    “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 05:12:21 AM PST

                    [ Parent ]

                    •  But the AGs (6+ / 0-)

                      will still be investigating wrongdoing, which could be used in a criminal case or in a class action suit.
                      This isn't the end of this for homeowners by a long shot.

                      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 05:21:53 AM PST

                      [ Parent ]

                      •  Yes, but THIS was the signature 16 month long (3+ / 0-)
                        Recommended by:
                        mightymouse, cslewis, semiot

                        investigation that wasn't an investigation that was supposed to definitively address the issues of robosigning and foreclosure fraud.

                        THIS was the where the combined force and weight of the Justice Department and all the AGs together were supposed to prove to the banks and the homeowners and the taxpayers that yes, justice would prevail and the miscreants would be punished.

                        Only it didn't and they weren't.

                        So why is a stand alone state investigation supposed to yield better results?

                        “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 05:35:19 AM PST

                        [ Parent ]

                        •  There were about 6 or 7 states (2+ / 0-)
                          Recommended by:
                          etherealfire, PsychoSavannah

                          that had their own investigations going on. Now there will be a federal task force with several states AG and the power of the federal government behind them.
                          There will also be criminal investigations going on, and one bank has already been criminally prosecuted:

                          The criminal prosecution was one of the first to target those who sold complex investments called collateralized debt obligations that were based on the valuations of mortgages. The securities - baskets of mortgage bonds - have been blamed by some for contributing to the housing bubble and its spectacular collapse.
                          The probe - which focuses on activities in 2007 and 2008 - centers on exaggerations that brokers made about the value of subprime mortgage securities. Authorities say brokers enticed investors to pour money into the securities market for subprime mortgages by making the market sound healthy.

                          Read more here: http://www.sanluisobispo.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 06:46:32 AM PST

                          [ Parent ]

                    •  But isn't that the difference btwn indiv and class (0+ / 0-)

                      I'm not a lawyer, but I thought that was part of it too.  There will be individuals who have strong cases but there were many others that did not, that probably, sadly, would have gone into foreclosure anyway.

                      Am I wrong on that? Really am trying to understand.

                •  The situation you are posting is not common. (4+ / 0-)

                  High cost forced placed insurance, ridiculously high fees for drive by appraisals, misapplied payments, and all the rest of the abusive fees did occur-- but generally not to people who were current on their mortgages. It was typically only when people would miss payments that they would get caught in this vortex of fees.

                  Some homeowners were apparently told (or thought they were told) by their banks to default in order to qualify for a modifications.   These homeowners who were actually told by their banks to default have a good case that they were financially damaged, and their lawsuits against the banks can proceed.   But in many cases in which borrowers in good standing were told to default on their mortgages to get a modification, it was in fact not the bank who told them this, but some third party scam artist who sold them on the idea that they could get their payment reduced.  In many cases like this, the bank told correctly them that they did not qualify for a mod, but the homeowner was greedy and did not want to hear that, and they unfortunately turned to the third party scam artist who told them what they wanted to hear.  

                  •  You say that the abuses only occurred to people (0+ / 0-)

                    already in default - based on what? Your opinion that this is the truth? I know that it is not the truth by reading and following this issue closely for years now.

                    Probably 20 minutes of Googling could show you how much in error you are:

                    NYT- How to Handle Force Placed Insurance

                    That article is from last month replete with examples of current homeowners subjected to force placed insurance.

                    You might give this a look as well, also filled with examples of current homeowners who became the victims as their servicers ran roughshod over them.

                    Senate Testimony from Attorney from The national Consumer Law Center

                    I actually don't even understanding the point you seem to be trying to make - that only homeowners in default were victimized by abusive fees - does that somehow make it less horrible in your eyes? It was abusive and illegal practice, regardless of whether the homeowner was in the current or default status.

                    “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 09:04:45 AM PST

                    [ Parent ]

                    •  Allow me to amend my comment. (0+ / 0-)

                      It was typically only when people would miss payments or when they were otherwise in default that they would get caught in this vortex of fees.

                      Insuring your home is a condition of a mortgage.  If you don't keep the insurance requred in the mortgage contract, you are in default on the terms of your mortgage, and yes, you will then likely get caught in the vortex of fees.

                      Fortunately, most people who have a mortgage understand that they must insure their home, and so they carry the required insurance themselves.  If you don't, it is true: your bank will get the insurance for you, and charge you some outrageous amount for it.  

                      •  Why not try reading the articles I linked to? (0+ / 0-)

                        Particularly the NYT one.

                        You don't seem to understand the concept of force placed insurance as it applies to the concept of mortgage servicer abuse.

                        Yes, we all know you have to keep your house insured if you have a mortgage.

                        “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 09:33:17 AM PST

                        [ Parent ]

              •  Such Bullshit--"Forclosed On in the Normal Course (0+ / 0-)

                of business."

                Try to pay attention---The sole reason for the fraudulent document forclosures was the the mortgage servicers were unable to show they had the right to forclose on properties.  Because they had no proof, they manufactured fraudulent documents to supply phony proof of the right to forclose.  

                Simply put, they would never be able to forclose in the normal course of business, so they needed to make shit up.

          •  The best thing about all of this (0+ / 0-)

            is that Obama could have used large coin seignorage to just make a $2k coin, pass it out to the "deserving" homeowners, and avoided the banks altogether.

            The two things Teabaggers hate most are: being called racists; and black people.

            "It takes balls to execute an innocent man." -- anonymous GOP focus group member on Rick Perry

            by Punditus Maximus on Fri Feb 10, 2012 at 10:20:22 AM PST

            [ Parent ]

  •  Love when he calls todays deal a "downpayment" (25+ / 0-)

    and I'm glad that the banks were not released from any future liability.

    What senses do we lack that we cannot see another world all around us?

    by fearisthemindkiller on Thu Feb 09, 2012 at 08:42:59 PM PST

  •  A flaw in your logic: (27+ / 0-)
    But if Mr. Schneiderman thinks this deal is good, and is only a beginning, we might all do well to trust him.
    When Schneiderman opposed the 50-state deal, he was applauded on the Left. Not because he is Schneiderman, but because the deal sucked.

    Now if Schneiderman then turns around and supports it, this in itself does not transform the deal into a good one.

    Your reasoning is based on the faulty premise that whatever Schneiderman likes is good. The deal must stand on its own. It is being criticized for its particulars, not who likes or dislikes it.

  •  I love Kossians with love in their name or.... (4+ / 0-)

    .....sig line. When there are three at once, I am going to propose that the occasion merits "A Whole lotta love"

    Link to the youtube below, the whole nine minutes of it.
    Whole the entire, authentic, original (1969) version.

    All 9 minutes of "A whole lotta love"

    "Are you bluish? You don't look bluish," attributed to poet Roger Joseph McGough, for the Beatles' Yellow Submarine (1968).

    by BlueStateRedhead on Thu Feb 09, 2012 at 08:49:37 PM PST

  •  I pray for all our sakes.... (3+ / 0-)
    Recommended by:
    ericlewis0, Onomastic, hooper

    That the diarist is right. I frankly like the cut of his/her jib.

  •  Aww, bullshit. We've been gamed again. (5+ / 0-)

    This settlement is crap. The banks get to systematically shit all over property law and get slapped on the wrist. There are any number of INDIVIDUALS who could personally pay this fine, it's nothing for these banks. You want a punitive amount that actually means something? Multiply this by 10. Then the banks would notice it.

    Just bullshit. We've been fucked again.

    "'club America salutes you' says the girl on the door/we accept all major lies, we love any kind of fraud"--The Cure, "Club America"

    by Wheever on Thu Feb 09, 2012 at 10:09:50 PM PST

    •  Doesn't sound like it (8+ / 0-)
      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.

      When New York Atty. Gen. Eric Schneiderman announced his participation in the settlement Thursday, he said it would not stop several ongoing efforts that he is leading.

      "On multiple fronts, we will continue to investigate the mortgage crisis that has impacted communities in every corner of this state, and ensure that justice and accountability prevail," Schneiderman said.

      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 05:26:01 AM PST

      [ Parent ]

  •  Rachel does a brilliant job (as usual) ... (10+ / 0-)

    ... with a compare and contrast between today's announcement and the tobacco industry settlement of 1998:

    Visit msnbc.com for breaking news, world news, and news about the economy

    •  I thought it was purile. (5+ / 0-)

      Yeah, the tobacco industry is just as important to the country as the banking industry.

      If you think you can destroy the banking industry without it having a negative effect on our already sputtering economy and the global economy for that matter, you're crazy.

      If she had compared it with the S&L cleanup, it might have made some sense, but then she couldn't have had footage of all those kewl kids carrying coffins.

      If Obama doesn't deserve credit for getting Bin Laden because he didn't pull the trigger, Bin Laden doesn't deserve the blame for 9-11 because he didn't fly the planes.

      by Bush Bites on Fri Feb 10, 2012 at 04:20:45 AM PST

      [ Parent ]

      •  Strawman alert. (2+ / 0-)
        Recommended by:
        Unit Zero, Reepicheep
        If you think you can destroy the banking industry without it having a negative effect on our already sputtering economy and the global economy for that matter, you're crazy.
        Nobody is proposing destroying the banking industry.  People are saying that individual banks who participated in criminal actions should be shut down, and their assets transferred to better actors.

        We need banks.  We don't need THESE banks, or any individual bank.  Too big to fail is too big to exist.

        -7.75 -4.67

        "Freedom's just another word for nothing left to lose."

        There are no Christians in foxholes.

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

        [ Parent ]

  •  I just . . . don't get it. (8+ / 0-)

    The big smoking gun in all of this is the robosigning.  It's the one unambiguous industrial felony.

    Why would you mess with that?

    The two things Teabaggers hate most are: being called racists; and black people.

    "It takes balls to execute an innocent man." -- anonymous GOP focus group member on Rick Perry

    by Punditus Maximus on Thu Feb 09, 2012 at 11:27:03 PM PST

  •  matt taibbi was hopeful last week (7+ / 0-)

    this week he's not so sure.

    personally, i'll wait to see how this pans out before jumping to conclusions, but the track record of this administration on this issues doesn't lend a terrible amount of confidence.

    something's better than nothing, but a pittance is still a pittance. best hopes for this being but a first step in a process that lays these criminals low, instead of slapping them on the hand.

    •  Here is what he is saying now: (0+ / 0-)
      UPDATE: Matt Taibbi writing at Rolling Stone:

      ...this looks like America's public prosecutors just wilted before the prospect of a long, drawn-out conflict with an army of highly-paid, determined white-shoe banker lawyers. The message this sends is that if you commit crimes on a large enough scale, and have enough high-priced legal talent sitting at the negotiating table after you get caught, the government will ultimately back down, conceding the inferiority of its resources.

  •  Lots of important stuff still stays in (15+ / 0-)

    I think this deal is actually a masterful tightrope walk.  At first glance, it doesn't seem to be that impressive, but when you dig a little, you find it's structurally sound.

    Specifics (borrowed from a very concise post from RhodaA yesterday morning):

    Specifically, this settlement does not:

    Release any criminal liability or grant any criminal immunity.

    Release any private claims by individuals or any class action claims.

    Release claims related to the securitization of mortgage backed securities that were at the heart of the financial crisis.

    Release claims against Mortgage Electronic Registration Systems or MERSCORP.

    Release any claims by a state that chooses not to sign the settlement.

    End state attorneys general investigations of Wall Street related to financial fraud or the financial crisis.

    “Are you calling the Koch brothers during the recess?” - Henry Waxman

    by thenekkidtruth on Fri Feb 10, 2012 at 01:34:41 AM PST

    •  What Does It Do? (1+ / 0-)
      Recommended by:
      Odysseus

      If it gives banks nothing, why did they just pay $25B for it?

      "When the going gets weird, the weird turn pro." - HST

      by DocGonzo on Fri Feb 10, 2012 at 05:08:15 AM PST

      [ Parent ]

      •  I imagine it gives them (0+ / 0-)

        a lower cost.

        Continuing the lawsuit would cost the companies a huge chunk of change, and it could go on for years. It was also negatively affecting their stock prices, and it was really negative publicity.

        By white collar standards, this is a shitty deal for the banks. They are used to paying in exchange for being exempted of all wrong-doing. They didn't get that here. So, they cut their losses.

        "YOPP!" --Horton Hears a Who

        by Reepicheep on Fri Feb 10, 2012 at 10:09:01 AM PST

        [ Parent ]

  •  I am just glad to say (4+ / 0-)

    that I voted for Schneiderman. Who knows what will happen next? I have a tad under two years left on my mortgage, I think my bank still has it, it should have cleared before MERs came into existence so there should be a paper trail.

    Americans, while occasionally willing to be serfs, have always been obstinate about being peasantry. F. Scott Fitzgerald, the Great Gatsby

    by riverlover on Fri Feb 10, 2012 at 02:10:05 AM PST

  •  "lead some kind of mortgage fraud investigtion" (2+ / 0-)
    Recommended by:
    DocGonzo, 420 forever

    You don't even know what it is or thought about his motivation for accepting the leadership position on it. Please. No rec. No tip. Do your homework.

  •  They're obviously DINO thugs. (1+ / 0-)
    Recommended by:
    ericlewis0

    snark.

    If Obama doesn't deserve credit for getting Bin Laden because he didn't pull the trigger, Bin Laden doesn't deserve the blame for 9-11 because he didn't fly the planes.

    by Bush Bites on Fri Feb 10, 2012 at 04:15:47 AM PST

  •  Great Diary, ericlewis0 (13+ / 0-)

    A million thanks for helping to clear up some of the confusion and/or misinformation.

    Schneiderman: "We have narrowed the releases to the point that all of the most egregious conduct ... is still on the table."
    Here are a few other economic related things that have happened, one directly related to this settlement, the others not:
    U.S. authorities are targeting at least 11 Swiss banks suspected of helping American clients cheat on their taxes.

    http://news.yahoo.com/...

    Companies Agree to Pay a Total of $548 Million in Criminal Fines–Includes Second Largest Criminal Fine Ever for an Antitrust Violation; Executives Agree to Serve Prison Time

    http://www.justice.gov/...
    In Victory for the West, W.T.O. Orders China to Stop Export Taxes on Minerals
    http://www.nytimes.com/...
    Workers Now Have Right to Class-Action Lawsuits Against Bosses

    The NLRB ruled that the right of employees to join collectively together to take action against their employees was a protected activity.
    http://www.alternet.org/...

    And here's the original Settlement Website that shows the key provisions and what claims are not being released:

    http://www.nationalmortgagesettlement.com/...
  •  What Did Banks Get? (5+ / 0-)

    So banks did have to cough up $25B. It's not much compared to at least $775B the banks stole, and the couple thousand bucks direct to some of the people they stole from isn't much compared to how much was stolen. But it is $25B, which is a lot of money, even if it's not a huge amount in bankster terms.

    Now Schneiderman, Warren and Obama are telling us it's "just the beginning", that banks are still on the hook for all they did.

    So why did banks agree to the settlement? If it doesn't end any consequences to them, why are they spending $25B on it?

    This is fishy. I don't trust anyone's word on money this big, no matter how good they look, especially not in an election year where several of them are running on each other's coattails.

    What specifically did banks gain in the settlement, that was worth $25B for them to buy?

    "When the going gets weird, the weird turn pro." - HST

    by DocGonzo on Fri Feb 10, 2012 at 04:58:02 AM PST

    •  Good question, though I have no idea. (4+ / 0-)
      Recommended by:
      Deep Texan, hooper, semiot, Diogenes2008

      I will say this though:
      Remember at the tail end of the BP oil disaster the Administration got BP to agree to a 20 billion dollar restitution payment? Wingnuts were like, "it's a shakedown!", and, IIRC, ex-Kosack Fishgrease commented, "You bet your a$$ it's a shakedown, and it's beautiful." (paraphrased)
      This very much reminds me of that move. Cheers.

      I ♥ President Barack Obama.

      by ericlewis0 on Fri Feb 10, 2012 at 06:03:56 AM PST

      [ Parent ]

    •  The banks benefit from the settlement in several (1+ / 0-)
      Recommended by:
      Phoebe Loosinhouse

      the banks aren't paying $25 billion.  They are paying $5 billion.  The remainder, estimated as much as $30-40 billion (not just $25 billion), is going to come from loan write-downs and refinancing.
      important ways.

      1)  They are directly paying $5 billion when they were heavily responsible for as much as $700 billion in underwater mortgages.

      2) They get the abililty to readjust loans that they no longer own, i.e. securitized loans.  As these securities are owned by investors, including large amounts by pension funds and Freddie and Fannie, the additional losses beyond the initial $5 billion are going to come from our pensions, our 401Ks, and taxpayers, througs Freddie and Fannie.  

      3) This has the additional benefit for banks in that they can adjust primary mortgages BEFORE they adjust secondary liens such as home equity loans, which the banks DO own.  This makes their secondary liens worth something above the zero dollars they are worth now and will help with their insolvency problems.

      4) Fraud is hard to prove when hoards of corporate accountants and lawyers are hired to obfuscate the truth, especially for corporate leadership.  Robo-signing, i.e. FORGERY, has been very easy to prove as in involves low level employees who are willing to speak or don't know to protect the corporate line.  Not settling on robo-signing, which is relatively easy for lawsuits to move forward on, keeps the door open for discovery for more serious and widespread crimes by the corporate management and leadership.  It allows lawyers to obtain subpoenas, search warrants, and other documentation in their ongoing investigation of robo-signing that may lead to discovery and new information that could lead to additional prosecution.  By settling the robo-signing cases, the banks are smartly closing the door on the discovery process, making the additional lawsuits much harder to prosecute.  This may be the most important benefit to the banks in this whole deal.

      I'm sorry, but your reality simply doesn't fit my economic model.

      by Reframing the Debate on Fri Feb 10, 2012 at 07:32:26 AM PST

      [ Parent ]

  •  "Significant" commitment? Subjective. (1+ / 0-)
    Recommended by:
    420 forever

    Personally, I don't need her or any other politico to tell me that this is a great deal for the bankers, and the usual crap for struggling homeowners.

    It's great how Democrats in Congress have been fighting SO HARD to get this mess straightened out.  I bet they like the deal, too.  The administration can put a pretty bow on it and say, "Lookee what we did for you!  So pretty!"

  •  By definition, settlements are compromises (11+ / 0-)

    I've been at enough contract negotiation tables to understand that every deal reached by contentious parties rarely gets the support of idealists. You look for a position you can live with for now, and you work on the next stage.

    And there WILL be a next stage.

    If Schneiderman and Warren can embrace this as net positive, that informs me that progress has been made. You don't get clear cut, slam dunk, "in your face" results from ANY negotiated outcome.

    When you are right you cannot be too radical; when you are wrong, you cannot be too conservative. --Martin Luther King Jr.

    by Egalitare on Fri Feb 10, 2012 at 05:11:24 AM PST

    •  but if you litigate (1+ / 0-)
      Recommended by:
      foufou

      You spend a lot of time and money and may ultimately end up with less than the settlement, or even nothing.

      •  But you'll put a lawyer to work (1+ / 0-)
        Recommended by:
        ericlewis0

        That's job sitmulus, as I hear lawyers are struggling for work.

        With the criminal investigations that have been started, the chance of getting a settlement, even if it is just to get you out of their hair, goes up.  Uou get someting, you give a lawyer a job, and stick it to the banks.

        Just another way of looking at it......

  •  If it helps people and helps them soon (3+ / 0-)
    Recommended by:
    sewaneepat, ericlewis0, hooper

    . . . then I think it is valuable. So much of the discussion of sell-out is about an ideology, and maybe a desire for revenge against banks.  I understand the appeal of both, but what I really want to see is something that keeps more people in their homes and gives real help to those who lost their homes.  To the extent the settlement can do that, (and I agree that we'll need to wait and see to some extent), then it will be a great thing.

  •  Release any claims by a state that chooses not to (0+ / 0-)

    sign the settlement.

    Didn't 49 states sign it? Does that imply it releases claims for those states?

    "You don't have the right facts!"~My Tea Party Neighbor

    by Therapy on Fri Feb 10, 2012 at 05:18:37 AM PST

  •  The settlement gives a release from all (2+ / 0-)
    Recommended by:
    mightymouse, Phoebe Loosinhouse

    state and federal lawsuits surrounding servicing of foreclosures, but doesn't give a release for origination or packaging of these loans.  So basically, it means the banks can't be sued for illegally having taken people's homes as those people can now apply for the $2000 checks.  Note that it doesn't release the mega-banks from individual lawsuits by individual homeowners, but really, even with $5000 (the maximum per household legal services provided by the settlement, at least in states where Republicans don't use the money to fill budget holes), how much effort can a broke and broken homeowner devote to retribution when they still have to put food on the table?

    I'm sorry, but your reality simply doesn't fit my economic model.

    by Reframing the Debate on Fri Feb 10, 2012 at 05:25:23 AM PST

  •  This was always the long game (2+ / 0-)
    Recommended by:
    ericlewis0, hooper

    Keep the banks fat out of the fire long enough to let them think they were in the clear, and they'd accumulate balances again.

    Next, negotiate a deal with hard-charging AGs, at the end of which the AGs and Justice start investigating for "real wrong-doing."  Every bank thinks only a few will be thrown to the wolves, and that their neighbor bank is worse than they are.

    Bail out some of the people.

    Win re-election.

    Throw the bums in jail, and possibly break up some banks.

    Bail out more people.

    For those of you who prefer Bartlett to Obama, re-watch the West Wing. For those who prefer Clinton, re-watch old news videos.

    by Ptolemy on Fri Feb 10, 2012 at 05:28:21 AM PST

  •  One little cavil: why just "hold BANKS accountable (2+ / 0-)
    Recommended by:
    ericlewis0, semiot

    ?" Thinking about it that way plays straight to the fool's notion that institutions, corporations, are "people," and the idea that institutional behavior will change or pain will occur due to "significant penalties" kind of misses how it really works.

    In the S&L ripoff, INDIVIDUALS were targeted and went to jail as well as having to absorb fines and judgments in civil litigation. If there's no impact on the individual mother h. fuckers who thought up and carried out this wonderfully complex interlocking set of clusterscrews, none of the mythical needs of the community for some kind of belief in a RuleofLaw will be met -- no deterrence, no restitution, no retribution. And the Really Smart Guys who are now fleeing Wall Street in droves, looking for other bubbles to inflate (at one or more removes from the nice safe places they pulled the meltdown from and thus even more protected from liability) will continue to strut instead of perp-walk.

    Just a thought.

    "Is that all there is?" Peggy Lee.

    by jm214 on Fri Feb 10, 2012 at 05:28:36 AM PST

  •  "Grants relief" (1+ / 0-)
    Recommended by:
    scorpiorising

    Whatta joke. What a bad, sad joke. First, $2000 is not meaningful relief. Second, most of the principal modifications will go to investment owners, not residential owners.

    Schneiderman has just gone way, way down in my estimation - as has Liz Warren for endorsing this disguised bailout. And to think that I actually dared to dream that there was someone in the government who'd actually take the banks to task.....can't believe what a fucking idiot I was.

  •  Ok, tell you what... (3+ / 0-)
    Recommended by:
    Wolf10, mightymouse, Odysseus

    I will make a deal with the defenders of this deal...
    If there are a ton of high level bank executives indicted in the next 9 months, perhaps I will consider this a good deal.  If there are banks broken up in the next 9 months, perhaps I will consider this a good deal.  If there is more of the same, and we move forward without looking back...then how about you join with those people saying we were completely screwed by this and nearly every "compromise" that has been made by this admin.

    •  First of all (4+ / 0-)

      it's not going to take 9 months. It's going to take a couple of years of investigations, at least that to try and help homeowners and then you still have criminal investigations and class action lawsuits to file.
      For another this is a settlement to begin to start fixing things for homeowners, not to bring down high level bank executives. That will come with the criminal investigations.
      You can't see the forest because you're looking too hard at the trees.

      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 05:56:07 AM PST

      [ Parent ]

      •  A couple years... (0+ / 0-)

        So, it will be a couple years after the crimes are committed for indictments to happen?  I mean, investigations have been going on since 2006 right? Well, that was Bush, jr....so, when Obama got into office he put some people on it, 2008.  So, 4 years of investigations.  Man, we should see a whole slew of indictments and criminal prosecutions in the next month then.

        •  You won't be satisfied (0+ / 0-)

          no matter what the outcome, it seems, so scream and cry and stomp your feet and see if that works for you.

          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 02:50:24 PM PST

          [ Parent ]

  •  I like how Schneiderman put it (5+ / 0-)
    Progressives sometimes forget it's not who you elect, it's providing the movement the power to do the right thing.
    Well said.

    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 05:48:05 AM PST

    •  Greg Sargent talks to Schneiderman (7+ / 0-)
      But he insisted that time will show that today’s settlement was a win — that it secured a framework that will ultimately result in a true accounting of the role big banks played in sparking the economic meltdown.

      “This is a small step in an economy where we have $700 billion in negative equity, but it is a significant step,” Schneiderman said, in response to criticism that the $25 billion settlement was far too small given the injuries sustained.

      “This is a down payment towards the overall goal of accountability, meaningful relief for those injured by the meltdown, and getting the facts out so we can ensure that this never happens again.”

      http://www.washingtonpost.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 05:49:46 AM PST

      [ Parent ]

  •  nice roundup of settlement reactions (0+ / 0-)

    An ambulance can only go so fast - Neil Young

    by mightymouse on Fri Feb 10, 2012 at 06:13:45 AM PST

  •  And of course, Gov Walker (7+ / 0-)

    is going to dip into the monies meant for struggling homeowners to help balance the shortfall from HIS disastrous budget.

    From JSOnline

    Wisconsin will use a chunk of its $140 million share of a national settlement over foreclosure and mortgage-servicing abuses to help the state budget rather than assist troubled homeowners, Gov. Scott Walker and state Attorney General J.B. Van Hollen said Thursday.

    Wisconsin, reclaiming its State motto: Forward!

    by One bite at a time on Fri Feb 10, 2012 at 06:29:45 AM PST

  •  I admit I'm skeptical but thank you. (2+ / 0-)
    Recommended by:
    ericlewis0, CuriousBoston

    Thank you for the diary.  

    When we talk about war, we're really talking about peace.

    by genethefiend on Fri Feb 10, 2012 at 07:02:08 AM PST

  •  No negotiating with terrorists (0+ / 0-)

    Anybody who thinks that the mere threat of a lawsuit is going to dissuade a banker or financier from pursuing an illegal course of action if there is profit to be made, just is refusing to face the reality that the people in the banking and financial system are essentially more pathological than rapists and murderers.

    In a study published by the journal Psychology, Crime and Law, Belinda Board and Katarina Fritzon tested 39 senior managers and chief executives from leading British businesses. They compared the results to the same tests on patients at Broadmoor special hospital, where people who have been convicted of serious crimes are incarcerated. On certain indicators of psychopathy, the bosses's scores either matched or exceeded those of the patients. In fact, on these criteria, they beat even the subset of patients who had been diagnosed with psychopathic personality disorders.
    The psychopathic traits on which the bosses scored so highly, Board and Fritzon point out, closely resemble the characteristics that companies look for. Those who have these traits often possess great skill in flattering and manipulating powerful people. Egocentricity, a strong sense of entitlement, a readiness to exploit others and a lack of empathy and conscience are also unlikely to damage their prospects in many corporations.
    These people will happily kill you and your family if that's what it means they can eat and live comfortably:
    Go ahead and continue to take us down, but you're only going to hurt yourselves. What's going to happen when we can't find jobs on the Street anymore? Guess what: We're going to take yours. We get up at 5am & work till 10pm or later. We're used to not getting up to pee when we have a position. We don't take an hour or more for a lunch break. We don't demand a union. We don't retire at 50 with a pension. We eat what we kill, and when the only thing left to eat is on your dinner plates, we'll eat that.
    There is no negotiating with such people. You either kill them or lock them up. Sorry, you may not want to face that, but that is the way it is.

    We have avoided the very unpleasant confrontation with these psychopaths until now because the bubble economy generated enough paper profit that everyone was relatively happy. But withpeak oil, climate change, and increasingly marginal gains in technological progress, we are entering a new era of increasingly restrictive resource allocation. This makes it impossible for the economy to generate enough paper wealth to keep the population and the psychopaths happy at the same time.

    And even if that were not true, please note the nature of the dynamic we are mired in. Debt, especially debt instruments such as derivatives, is rising faster than the ability of the real economy to pay off those debts. This has been a repeated problem through all of human history. Obviously, we have not yet learned the lesson.

    So, mark my words. This settlement is merely window dressing. The fundamental problems remain. Income inequality will continue to worsen, the rich will keep getting richer, the standard of living for 80 or 90 percent of Americans will continue to decline, and the usurers and financiers will not be deterred from their psychopathic behavior.

    Not until you treat them like psychopaths.

    A conservative is a scab for the oligarchy.

    by NBBooks on Fri Feb 10, 2012 at 07:12:42 AM PST

  •  Contrast to Tobacco Settlement is stark (1+ / 0-)
    Recommended by:
    PsychoSavannah

    When the tobacco deal was done, (for a pittance), it totally absolved the tobacco industry and it's players of any further liability.

    This settlement does no such thing...

    Major blowback soon coming to the banks,perp walks included.

  •  This is a shit sandwich, anyway you look (4+ / 0-)
    Recommended by:
    bobdevo, NBBooks, splashoil, TimmyB

    at it:

    UPDATE: Matt Taibbi writing at Rolling Stone:

    ...this looks like America's public prosecutors just wilted before the prospect of a long, drawn-out conflict with an army of highly-paid, determined white-shoe banker lawyers. The message this sends is that if you commit crimes on a large enough scale, and have enough high-priced legal talent sitting at the negotiating table after you get caught, the government will ultimately back down, conceding the inferiority of its resources.

    * * *

    Yves Smith, writing at NakedCapitalism:

    The Top Twelve Reasons Why You Should Hate the Mortgage Settlement

    [...] As we’ve said before, this settlement is yet another raw demonstration of who wields power in America, and it isn’t you and me. It’s bad enough to see these negotiations come to their predictable, sorry outcome. It adds insult to injury to see some try to depict it as a win for long suffering, still abused homeowners.

    1. 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.

    2. "If the new Federal task force were intended to be serious, this deal would have not have been settled. You never settle before investigating."That $26 billion is actually $5 billion of bank money and the rest is your money. [...]

    3. That $5 billion divided among the big banks wouldn’t even represent a significant quarterly hit. [...]

    4. That $20 billion actually makes bank second liens sounder, so this deal is a stealth bailout that strengthens bank balance sheets at the expense of the broader public.

    5. The enforcement is a joke. The first layer of supervision is the banks reporting on themselves. [...]

    6. The past history of servicer consent decrees shows the servicers all fail to comply. Why? Servicer records and systems are terrible in the best of times, and their systems and fee structures aren’t set up to handle much in the way of delinquencies. [...]

    7. The cave-in Nevada and Arizona on the Countrywide settlement suit is a special gift for Bank of America, who is by far the worst offender in the chain of title disaster. This move proves that failing to comply with a consent degree has no consequences but will merely be rolled into a new consent degree which will also fail to be enforced. [...]

    8. If the new Federal task force were intended to be serious, this deal would have not have been settled. You never settle before investigating. It’s a bad idea to settle obvious, widespread wrongdoing on the cheap. [...]

    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). [...]

    10. A deal on robosigning serves to cover up the much deeper chain of title problem. [...]

    11. Don’t bet on a deus ex machina in terms of the new Federal foreclosure task force to improve this picture much. If you think Schneiderman, as a co-chairman who already has a full time day job in New York, is going to outfox a bunch of DC insiders who are part of the problem, I have a bridge I’d like to sell to you.

    12. We’ll now have to listen to banks and their sycophant defenders declaring victory despite being wrong on the law and the facts. They will proceed to marginalize and write off criticisms of the servicing practices that hurt homeowners and investors and are devastating communities. [...]
    * * *

    And at Firedoglake, Scarecrow writes of the 'settlement':

    Obama’s Guiding Principle: Leave No One Accountable

    Obama’s people have performed this function for America’s looters over and over again. They did it for Wall Street, the banks, the rich tax evaders, the insurance companies, the oil companies, the gas companies, the coal companies, the CIA, the DoD, and numerous torturers and their legal/policy enablers and associated war criminals in the previous administration.[...] The Obama Administration has followed a predictable pattern we now recognize. It has consistently functioned like criminal defense counsel, whose mission is to get their criminal clients, the major corporations and executives who fund their elections, off with no admission of guilt, no forced resignations, and as little harm to their reputation, or that of the counsel, as possible. To do this, they neutralize anyone with an ounce of public purpose in their veins.

    Its role is then to convince the public that whatever you thought or feared was going on in America, and whoever you believed had caused the collapse of America’s economy, caused millions to lose their jobs, their homes and their retirements and continued to loot the country, it’s time to look forward. Because everyone who matters — and that’s not you — now agrees, they say, to function in the public interest, even though it’s a bald face lie, since nothing has changed and the looters and their complicit overseers are still in charge.

    Obama’s people have performed this function for America’s looters over and over again. They did it for Wall Street, the banks, the rich tax evaders, the insurance companies, the oil companies, the gas companies, the coal companies, the CIA, the DoD, and numerous torturers and their legal/policy enablers and associated war criminals in the previous administration.

    Consistent with this strategy, Obama’s team must silence, neutralize or punish anyone who protests or blows the whistle on the massive criminality and corruption involved. It must also emasculate the left and what’s left of the liberal wing of the Dem Party, using the argument that the Administration is not nearly as awful as the other Party’s people, who openly glorify looting and killing and vilifying the victims.

    But of course, when we were ruled by the latter, everyone with any humanity was repulsed by the open looting and killing and indifference and was willing to say so. When the Administration sanctions it, however, we are supposed to bite our tongues, because it could be worse.

    Well, it’s worse, and it’s more insidious and corrupting of our souls than where we were four years ago. It is evil.

    # # #

  •  Anyone who's known (6+ / 0-)

    Eric Schneiderman for a while, as I have, knows that he's not going to sign off on a pathetic sellout just because he got appointed to head some committee a couple of weeks ago. He's got plans; this is just the beginning.

    He is smart, tough, and one of the most committed progressives to achieve public office I've ever known. I can't think of anyone I'd rather have working on this.

    "The only thing we have to fear is fear itself."........ "The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little." (yeah, same guy.)

    by sidnora on Fri Feb 10, 2012 at 08:02:42 AM PST

  •  The "settlement" does nothing to address (2+ / 0-)
    Recommended by:
    taonow, splashoil

    the underlying issues, and is simply lipstick on a pig.

    The settlement was reached to allow the banks to continue to essentially operate bidness as usual without meaningful oversight.  As Damon Silvers of the Congressional Oversight Panel which monitored the bailouts, once put it, its purpose is to preserve the capital structures of the largest banks.

    We can either have a rational resolution to the foreclosure crisis or we can preserve the capital structure of the banks. We can’t do both.

    I tremble for my country when I reflect that God is just; that his justice cannot sleep forever. ~Thomas Jefferson

    by bobdevo on Fri Feb 10, 2012 at 08:23:30 AM PST

  •  Hmmm (1+ / 0-)
    Recommended by:
    NBBooks

    Warren's comments are less than a stirring endorsement, more like a backhanded criticism of policies to date.

    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.”
    Matt Taibbi also having some serious second thoughts about it!
    A few weeks back, I was optimistic about it – I had been worried that it was going to contain broad liability waivers for all sorts of activities, and I was pleasantly surprised when I heard that its scope had essentially been narrowed to robosigning offenses.

    However, now that the settlement is finalized, and I've had time to think about it and talk to people who know far more than I do about this, I'm feeling pretty queasy.

    Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

    by taonow on Fri Feb 10, 2012 at 08:31:03 AM PST

  •  I've learned to wait for results. (1+ / 0-)
    Recommended by:
    splashoil

    Schneiderman and Warren like the deal. That's... ok I guess. I still have to question how charging a diminimous fine over trillions of theft equates to any kind of a win. But I want a return to the rule of law more than anything. This level of theft can't ever be truly corrected. Those homes are irrevocably lost to the defrauded homeowners.

    I'll wait until I see the results of these investigations. But I've learned not to expect alot from this administration when it comes to enforcing laws against bankers and I think more kossacks need to be mindful that the President is in campaign mode. Of course the administration wants people to think that something is being done. Why this wasn't done three years ago is maybe a question we ought to consider...

    "If you can find money to kill people, you can find money to help people." -Tony Benn (-6.38,-6.36)

    by The Rational Hatter on Fri Feb 10, 2012 at 08:38:32 AM PST

  •  Democracy Now (0+ / 0-)

    Democracy Now cuts through the bs.

  •  I could have used the settlement money but.... (4+ / 0-)

    I heard from some friends that banks had been dragging their feet on foreclosing on my home because they needed to wait until the new year to avoid some sort of liability. They had been stalling for months on auctioning our home off at the courthouse. Then, surprise surprise. we get a notice that our home was taken over by the disgusting BofA on Jan 5th. Now I know why. They are only liable to pay us money if our house was foreclosed on between the dates of Jan 1 2008 and Dec 31 2011. At every turn they have screwed us and played games that make sure that we lost our home. Today is our last day at our home. Curse Bank of American and those who profit off of our loss.

  •  Ya know, I've been thinking about it, (0+ / 0-)

    and it just comes down to an issue of trust.  I don't trust President Obama to execute a complex deal in favor of the people, rather than of the banks.  I understand now that no matter how good the deal looks, I simply expect the worst imaginable execution.  I feel like the President has made his priorities clear through three years of relentless falsehood, blaming of homeowners, and coverups.

    So, sure, this might be a fine deal on paper.  But fundamentally, banking systems are built on trust, and Obama just isn't a person who thinks that bankers should be prosecuted for mass fraud.  So for any deal, I'm just looking for how we got shafted.

    I recognize that this is my bias, and I would love to be proven wrong.  But this just all feels like an election year stunt, and we're back to business come mid-November.

    The two things Teabaggers hate most are: being called racists; and black people.

    "It takes balls to execute an innocent man." -- anonymous GOP focus group member on Rick Perry

    by Punditus Maximus on Fri Feb 10, 2012 at 10:24:47 AM PST

    •  It is your bias (8+ / 0-)

      And so many others.

      And it's unfair and based on left-wing flame-throwing that's rarely grounded in reality, from my perspective.

      Take the contraception "cave" from today, for example. Isn't the bottom line that President Obama, THIS President, no President before him, got contraception covered as preventive care, meaning no co-pay and it must be covered by every insurer in the country.

      Think about that for a few moments and weigh it against the yammering against PPACA.

      That's a big f***ing deal, like so many of the quiet provisions of Obamacare, lost behind the right-wing squeals of "death panels" and the left-wing squeals of "single payer!"

      He. Got. Contraception. Covered. 100%. For. Every. American. Insurance. Policy.

      He does this kind of thing with almost every decision and every piece of legislation.

      •  No, it's deeply grounded in reality. (0+ / 0-)

        Obama's people in Treasury said, when criticized about HAMP's failure, that HAMP was actually a sham program designed to steal a last few payments from underwater homeowners before the banks take their houses anyway, to prop up bank balance sheets.

        http://blogs.reuters.com/...

        Obama personally hired Alan "300 million tits" Simpson to co-chair his Deficit (Catfood) Commission, then kept him on after he made the above comment.

        I agree that Obama's been a lot better during this election year than when he wasn't facing reelection.  But that has terrible implications for 2013.  Obama always has his finger on the "shaft you" button.  I'm glad he's doing better at his reflexive twitch, but again, I see no reason why he won't go back to his true self once he's used us to get elected again.

        The two things Teabaggers hate most are: being called racists; and black people.

        "It takes balls to execute an innocent man." -- anonymous GOP focus group member on Rick Perry

        by Punditus Maximus on Fri Feb 10, 2012 at 11:01:37 AM PST

        [ Parent ]

  •  Funny how the people complaining... (1+ / 0-)
    Recommended by:
    ericlewis0

    ...about the settlement aren't the ones who would be helped by it.

    It's easy to bitch when you don't have much at risk.

    "We have so much time and so little to do. Strike that, reverse it." -- Willy Wonka

    by Huginn and Muninn on Fri Feb 10, 2012 at 10:25:07 AM PST

  •  I felt much better about this after seeing him on (1+ / 0-)
    Recommended by:
    ericlewis0

    TRMS. Still worried about the statute of limitations for a lot of the issues, would love to see some sort of one-time extension of the SofL for some of the crimes committed under Bush/Cheeney.

    Information is abundant, wisdom is scarce. The Druid

    by FarWestGirl on Fri Feb 10, 2012 at 11:48:42 AM PST

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