Banks Offer Paltry $5 Billion In Exchange For Full Expungement Of Robogate Charges And Complete Release Of Any Future Claims

Tyler Durden's picture

And there were those who thought that the $20 billion demanded by state and federal officials of banks caught in various acts of robosigning fornication was a joke. According to the WSJ, "The nation's biggest banks are willing to pay as much as $5 billion to settle claims by federal and state officials of improper mortgage-servicing practices." Needless to say this is a sham of a farce of a "settlement", and amounts to one quarter in trading perfection for the likes of the afore discussed JPM, BofA or Goldman. Recall that Goldman pays well over three times this amount in bonuses each year. On the other hand, this is merely a counteroffer to the $20 billion preliminary bid. Which means that the final number to put the entire robosigning affair behind us will be about $10 billion give or take. And banks can go back to doing what they do best: post 0 trading losses per quarter, and other such infinite sigma events.

From the WSJ:

Bank representatives met Tuesday with state and federal officials in the latest round of negotiations. On Friday, banks received revised term sheets from government negotiators. One sheet revised proposed changes in mortgage-servicing practices. The second term sheet governs how penalties would be allocated; among other things, it details how they would have to reduce loan balances for certain borrowers.

The banks intend to propose that as much as $5 billion be used to compensate any borrowers previously wronged in the foreclosure process and provide transition assistance for borrowers who are ousted from their homes, according to people familiar with the matter. One idea is that foreclosed borrowers could receive several months of free rent once they find new housing, one of these people said.

Not only that, but the $5 billion token amount is supposed to be a broad release, in essence granting banks immunity from any and all future related lawsuits:

They must also reach an agreement on the claims state officials and federal regulators will surrender as part of any settlement. Banks are less likely to sign off on any deal that doesn't provide a broad release of claims from state attorneys general in the most populous states.

In April, bank regulators sent 14 institutions orders that required the banks to improve foreclosure practices but didn't include fines. Banks have 60 days to set up plans that would clean up their mortgage-servicing processes. They also have to hire an independent third-party consultant that will examine all foreclosure cases in 2009 and 2010 for any errors.

This development is naturally precisely what the Attorney Generals, who have been in on this from the beginning are looking for. They will next be able to extract a few more billion in pocket change from the banks which at last check had about $1.3 trillion in excess reserves, declare themselves fighter for the common man, and proclaim victory against the banker scourge. And from that point on, banks will merely use the Buffett defense: "if questioned about this matter in the future, [they] will simply refer the questioner back to this release."

And so they win again.

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israhole's picture

As long as we stand for it, we'll be subverted by rats.

XenoFrog's picture

In a fair world, people would be able to rob banks, then offer to return 1% of the money in exchange for the dropping of all charges without admitting the robber did anything wrong.

MissCellany's picture

Hell, yes...and that way, at least some of the money would end up in PEOPLE's hands...

Cdad's picture

I hope the state AGs do settle.  It will hasten the revolution.

Careless Whisper's picture

Where is nine inch Spitzer when we need him? He fined Pauly Walnuts and tha boys $1.4 Billion in 2002 for some stupid IPO pumping. He would have these bankstas begging, begging, to pay $100 Billion to be left alone.

rocker's picture

+10   Why yes, they took him out while Wallstreet gives us the CNBC whores for Jamie Dimon drewing over him on air.

Who gets to do him first, Michelle, Melisa or Karen.  What a Pig Show.  At least Bloomberg has class. 

rocker's picture

Thinking about this a bit more. So who gets to do Lord Blackass, (Blankfein).  Big Ben or Tiny Tim.  Interesting. Hmmmm. 

Problem Is's picture

4 inch Spitzer was thoroughly neutered...

The Eunuch Spitzer can now be seen pontificating on TeeVee...

sun tzu's picture

Revolution? Funny. I bet 99% of the population don't even know what the banks did. They'll be happy that the banks had to fork over $5 billion and the state AG's will run for re-election with this "victory" under their belts.

Ace Ventura's picture

I wouldn't say only 1% are aware, probably more like 4 or 5%. As for the rest of what you said, unfortunately I find myself in whole-hearted agreement.

If there is a positive note, a revolution can be started once 15-20% critical mass is achieved. Naturally, trying to achieve that mass in the current amerikan societal landscape of iGadget idiot-box cheetos junkies is something of a 'challenge'.

(Oh, who am I kidding! We're freakin' doomed!)

G-R-U-N-T's picture

How come government and banks get to practice looting lawlessness while we get our ass kicked?

Perhaps battered wife's syndrome is in fashion these days and American's just likes to have the living shit kicked out of them over and over and over and over again and again and again and again...

rocker's picture

 They run the nation.  President has nothing to do about any of this stuff.

rocker's picture

Did I say run the nation.     My Bad.......   They ruin the nation.  One household at a time.

bigelkhorn's picture

Yes! And bank tards have our best interest at hand. We are so screwed people. Not proud to be an american some days. The market is bat shit crazy. 

That guy from FFT is oz is good, I been following him for a while and he called the market crash in 2008. 


I belong to his membership site, its awesome and has live videos and everything to follow along. 

Makes it easy to take money from the market even if you are a newbie!. 


His new monthly trading club is opening tomorrow, and over at :-

Ben Fleeced's picture

If you are going to punk a junk, claim it you f'n breeding females dependent upon your mothers teet for sustenance.

@Bigelkhorn=((not so much+(hellx2)+NO))/grammar

free kick in the throat award belongs to...


Don Quixotic's picture

"Banks are less likely to sign off on any deal that doesn't provide a broad release of claims from state attorneys general in the most populous states."

OK, so let them refuse to sign and let's take this thing to court. Why are we not ok with that?



Rynak's picture

Whom do you mean with "we"?

rocker's picture

Exactly,  Jail First.  Compensation after.  Just like Bernie Madoff.  Bernie needs a angel doing God's work.

 Please...................................................Somebody............But his ass in Jail with Bernie.

Gubbmint Cheese's picture

They are going to push people too much.. And then there will be absolutely no going back... Why they don't see that danger is beyond me..

docj's picture

Ask the elite Parisians from 1796. This current crop is no smarter or more sophisticated (or are imbued with less hubris) than they, so of course they don't 'see it coming'.

Then again, they didn't have French Idol and McPierre's back then to keep the rabble occupied.

Meatier Shower's picture

Yeah, but they had plenty of cake.

Ben Fleeced's picture

"Why they don't see that danger is beyond me.."

Uhnle33 u r knot Uhmerican u needz sum englicks sxills.

What danger plagues your house m'lord?

trainrobbery's picture

Too big to fail!

Too big to fine????  What?  

Rynak's picture

"Fine" now simply stands for "price to ignore laws".

Amish Hacker's picture

Right. Kind of like membership dues in the Masters of the Universe Club.

Rynak's picture

Tax-deductable via monetization too. Pay first, get it back afterwards at the next bailout.

docj's picture

Yep, it's a joke alright. And the joke is on us sheeple.


whiskycreek's picture

10k views vs. 28 million....ya stay there

Meatier Shower's picture

So you judge the quality of a video only by the number of views it has?

You must think that Fred is high quality also.

Fucking sheep.

WakeyWakey's picture

and the above video is from 2007 before the financial crisis and includes the line 'Wall street crime will never send you to the slammer'.

This shit has gotta be stopped.

overmedicatedundersexed's picture

Big criminals never pay it's the law of the jungle- our bankers wrote it and bought it in the courts and congress..don't like it too bad.

KingdomKum's picture

It's time to rise up and protest this gross injustice


Vic Vinegar's picture

Go for it dude.  Protest it!

downwiththebanks's picture

If you do, prepare to get attacked viciously on these pages by those who favor austerity for everyone but the banker-gangsters who have brought the economic system to its knees.

downwiththebanks's picture

I comprehend that whenever people take to the streets to protest their legitimate grievances, and it's covered on ZeroHedge, the Keyboard Cowboys come out in force.

chubbar's picture

What "downwithbanks" is alluding too here are the
threads concerning the Wisconsin Public workers
Several posters took the position that it was
entirely possible that a 160K salary for a bus
driver, a job whose barrier to entry is about 30
minutes of practice in an empty parking lot,paid
for by 40K/yr taxpayers MIGHT be something
considered excessive. It was also concluded that
this salary doesn't exist in the private sector
thus lending credibility to the idea that SOME
of the public sector workers are overpaid as a
result of union power and threats. An
idea that caused apoplectic fits by "downwithbank
It was also pointed out that Public Sector workers
are paid by taxpayers, NOT out of the personal funds
of Bankers. Thus lending credibility to the idea
that ZH posters can be against both bankers AND
the concept of overpaid gov't workers. THAT is
what is sticking in the craw of "downwithbanks"
and is responsible for his inability to get past
the Wisconsin Public Union meme. He finds it
inconsistent to question the high salary of a taxpaid
bus driver as well as the billion dollar bonus of
a taxpaid banker. go figure.

Mec-sick-o's picture

Attorneys and Banksters lying together.


Arkadaba's picture

Let's chill out. Hate everything that is happening in the world today but one of my favs: Note that I don't recommend going awal as a trading strategy but, wtf:

Smartie37's picture

How many dollars CENTS per fraudulent title is that ?!?

Ecoman11's picture

Nobody will care. Carry on.

max2205's picture

It really too bad states are that desperate for cash that they'd settle for this amount. Banks know it too. This is worse than TARP!

gbresnahan's picture

I think $500 billion is more like it.  We're long overdue to send the banks a crystal clear message that the game is over.

buzzsaw99's picture

Why don't they just threaten to crash the market again? Extort me bitchez!

max2205's picture

It really too bad states are that desperate for cash that they'd settle for this amount. Banks know it too. This is worse than TARP!