Dick Bove On The Foreclosure Settlement: There Is No Sanctity Of Contracts; Only Fools Meet Their Financial Commitments

Tyler Durden's picture

In a moment of surprising clarity this morning (or perhaps driven by simple ulterior motives as his favorite bank may well be unprepared to cover even this moderate cash payment from existing reserves, as we warned back in January) perpetual bank optimist Dick Bove had some harsh words for the now finalized bank settlement, which he called the "mortgage deal from hell" - "Those people lucky or smart enough to stop making payments on their homes may get their loan balances reduced. Other beneficiaries of the agreement may be homeowners who have seen the value of their houses drop below the size of their mortgages. They get a freebie that other homeowners who have paid their mortgages down will not get....Homeowners who made large down payments on their homes or made the terrible mistake to pay down the principal on their mortgages do not qualify. Homeowners who made minimal or no down payments will get the windfall benefit of a lower principal repayment or a cash payment." And the true bottom line: "There is no sanctity of contracts in the United States. Only fools meet their financial commitments. The non-payers are the truly enlightened." And that is the summary of modern US society in a nutshell, and explains why despite all the deleveraging, inflation still remains a potent threat as the bulk of a household's mandatory continues to be merely discretionary, with everyone else footing the bill. Finally, as Rick Santelli pointed out subsequently, the banks are paying for this settlement using cash proceeds from previous bank bailouts which have not yet been paid out. So to be even more blunt than Dick and Rick -the US taxpayers bailed out the banks, which are now using  the balance of said proceeds to pay a settlement which amounts to the tune of $2,000 per every person foreclosed on in the past 3 years, in order to assure their vote for Obama, while in the process trampling contract law, as no longer will anyone in America honor anything printed and signed.

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Benedict Farse's picture

How about the iPad Standard? We make iPads to back a paper currency, that creates jobs, which will buy more iPads, so we'll have to make more, which creates more jojo jojo jibber fvckity fvck FUUUUUUUUUUUUUUUUUUCK!!!

Harlequin001's picture

Of all the back-woods places you can invest your money you'd have to be fuckin' nuts to invest in the US...

You have to look long and hard to find a finer banana republic...

Comay Mierda's picture

OMFG Dick, I take back every insult I've hurled at you. Sure your stock pick timing sucks. But damn, you held your ground on the Communist News Broadcasting Center.

btw, my january mortgage payment was my last

Xkwisetly Paneful's picture

Contract law was tossed in the sewer with the Chrysler bond holders if not much sooner.

Pladizow's picture

In how many ways, each an every day are we witnessing the end of the American empire and way of life?

Harlequin001's picture

You're not. There never was any American empire but that's beside the point. Seriouisly, $5B each for 5 banks to settle?


trav7777's picture

well, whomever I called dumb the other day for paying the debts of others, Bove is agreeing with me.  Fools pay.

The real slaves are the payers and those who carry all the dead weight.

This truly is a ghettoed out grifter nation.

GeneMarchbanks's picture

It's masochism and you know it, the sadist only finds him and uses him. Brutal to watch.

Harlequin001's picture

You borrow money and you pay your debts for as long as it's making more money. When it stops you get out. Only fools labor to pay back bad debts. No one else does...

The trisk is to be wary of who you lend to...

Uncle Remus's picture

trisk = trick + risk. Nice.

Harbanger's picture

What about all the people TRICKED into a Student loan for a useless College Degree that doesn't make them any money?

trav7777's picture

a fool and his money are soon parted.

The planet is chock full of fools.  Americans are wilful fools

akak's picture

The planet is chock full of fools.  Americans are wilful fools


True, and yet irrelevant.

Make me laugh!

The biggest fools of all are the nose-picking, public spitting, eternally blobbing-up Chinese citizenism citizens.

rocker's picture

Bovie is a very sly weasel. His smile at the end of the interview would make Lord Blankfein jealous.

Al Gorerhythm's picture

It is hardly foolish to believe in something that you have been educated to think is "The Way". The masses are trapped in an inculcated mind set. Breaking that code is most difficult and beyond the ken of most graduates from their system. Give them some slack and help out if you are aware.

monoloco's picture

Loan children with no jobs or credit history masive amounts of money backed by imaginary future income. What could possibly go wrong?

Al Gorerhythm's picture

@ Trav. Yeah, but why is Bove agreeing with you? Bove is a disingenuous shill who is stating that it is a mugs game to pay your mortgage (true dat) and that the guy getting a bailout is getting a leg up at the expense of the hard working Joe, who played the lap dog role as a good little debt slave.

"Oh,no," he claims, "The banks only made losses in the end. They weren't responsible for any preditory lending, securitization of dead-beat loans into AAA rated bonds,etc., no they didn't make any fees and bonuses from that. No, they made losses and bailouts didn't go to them, anf accounting rules haven't been changed to keep their books balanced and no, they didn't recapitalize their balance sheets with Fed injections." No, that just happened in a vacuum and the banks can't be held responsible for that. What a miserable piece of shit. Always a pleasure, DICK.

Back in the day, I know of perfectly reasonable people, of sound educational background, who I warned repeatedly, until I was blue in the face and their eyes had glazed over, that the housing bubble was going to burst, that it was unsustainable and that they were going to get burnt (just before the first tranch of bonds were auctioned in July of '07 for 10 cents in the dollar and then whipped off the table). The figures, charts, bell-ringers (conspiracy nuts such as Schiff, Willie, Blackand a multitude of others), the Credit Default Swaps, CDOs and other bank strategies were there to see but the advertising by the banks had worked its magic. They (mesmerized buyers enthralled by the money [bank] system) stripped off and went skinny dipping, " 'Cos everyone else was doing it and the banks said we could afford it". It was the get rich scheme of the century. What could go wrong? Houses always went up, right.

This rewriting of history by Bove and his ilk is selective, disgusting and lying by ommision. His agreeance with you is affected and a matter of happenstance, unless you are of the same opinion.

It's like MDB trying to create the mindset that it is the silver and gold stackers who are creating the problem because they didn't spend their money(?) on trinkets, in order to keep the GDP ticking over. Sick pieces of shit.

As the above poster said; "We work and make things, to back a depreciating and ultimately worthless paper currency". How fucking wrong is that? We can't even store our labor in it or create wealth with it because it is fundamentally a wealth  transfer device to those who are unpoductive, just as this settlement demonstrates.

Spigot's picture

Hey, no shit. Immunity from prosecution over fraud, not needing to "buy back" materially fraudulant mortgages, etc...way tre bargain there for $5 Bill. Shit give me some of that action!

JW n FL's picture



Dick Bove is an Idiot, Dick Bove is a wanna be Republican Conservative and Dick Bove therefore is a Treasonous Piece of Shit.. who should be tar and feathered! And then Hung on the White House Lawn with his Brethren.


The Banks….

That Dick is Crying! Foul!! over….

Created Fee’s of Billions and Billions ever time they combined these Loans into a new package.



And then there was the CDO’s that paid so well because of the Failure of the Structured products offered!



The Banks have since.. Created Fees of Billions and Billions, yet again! To sell the New Normal Re-Packaged Deals..




Writing down the losses and re-capturing the cash on the bottom line.



As for the Home Owners who paid NOTHING?!?!?!?


this program was grown by 100’s of %! But there was NOT! enough money there to cause a collapse of structured debt products that had been repackaged half a dozen times PLUS!


There is NO WHERE in the United States that the Market has dropped 20%!



The Real Estate markets have dropped (100’s of %) Hundreds of Percent! In some places but at least! 50% across the board..

So this magic math of 20% and the guy next door is fucked because he didn’t pay is BULLSHIT!

The guy next door is down 50%!



I will add as well that this Mess, this Global Mess is because of Wall Street and its short term view.

We as a Country are controlled by Lobby Dollars that flow from the top 1% of the top 1%.. 80% of the lobby dollars in America come from the top 1% of the top 1%..


The Banks that Drove the ENTIRE! Country off the Cliff! are still the Biggest Lobby! And they still get the MOST! MONEY!!



Those dollars manipulated Washington DC into ignoring our Energy Security!

We don’t have enough CHEAP Energy! To go round in America! To sustain growth of ANY KIND!

The World does NOT! have enough Cheap Energy to Sustain Growth of any kind!



The Central banks have Printed Mountains of Cash!

Cash or Liquidity is NOT!! the Problem!



Wall Street Fucked us ALL!! Over!

That is why American Lost their Jobs!

That is why Americans can NOT! pay their Mortgages!



Dick Bove is the problem! Him and everyone like him!


Archduke's picture

+1MM for research and synthesis.

Quick's picture

True with alot BS spouting the wrong conclusion !!




EnglishMajor's picture

What are you talking about?  Just turn on the TV. I recommend catching up on the news with a little PNN (Propaganda News Network).  In case you didn't know, we are cashing checks and snapping terrorist necks all over the world while we spread democracy and freedom to the oppressed along with the convenience of only having to deal with one currency when you sell your oil. The next stop for American Exceptionalism...the moon! Fuck you Russia, Newt called it first. Just drop us off and come back in an hour. Disney Sea of Tranquility, I'm there.

SamuelMaverick's picture

All joking aside, this is a fucking tragedy for the USA, the rule of law, fair play, and contracts. Justice has just been flushed down the toilet.  

Caggge's picture

The rule of law? When has there ever been an equal rule of law in the USA? You must be reading school history books. The real history doesn't match the sheeples version.

xela2200's picture

I feel contractual law is one of the few valid arguments to have a government as a necessary evil. Small business just cannot catch a break in this environment of uncertainty and lawlessness. One has to love how these people justify all these injustices as been for the common good. The same arguments communism makes.

trav7777's picture

Contracts now are about who you know, not the law or the black letter.

If you have superior patronage, your "rights" are whatever you say they are.  It's like playground or jailyard law.

stirners_ghost's picture

It's the only kind of law that has ever actually existed; the law of the jungle. All of the spirits that the sucker masses are beholden to--rule of law, society, the American People, security, law and order--function actually to cement the aristocracy by mindfucking the plebes into submission to a higher cause. Where the hypocrisy might be too obvious, simply invent new terms to distinguish between the legitimate and criminal realization of equivalent concepts; nobody will question that imprisonment is legitimate, while kidnapping is criminal, or that taxation is legitimate, while extortion is criminal, etc. And while the intellectual elite idiots hang out on internet message boards bickering about the violation of this or that right [special permission], the kings of the jungle who profit from all of the un-rights [laws] sit back and count their loot.

trav7777's picture


At one point, the country was run by christian white males who had principles and morals.  The standards they established of ethics and rules of behavior stood the nation in good stead until that dominant morality was displaced by a judeo ethic.

The christian white male, George Washington, had the option to be KING.  He refused and set the standard of consecutive terms that would ultimately be enshrined into the Constitution.  Other christian white males could have become kings or despots and yet they insisted on rules that limited THEIR OWN POWER.

Max Fischer's picture



And why was the dominant morality displaced by a Judeo ethic? 

Max Fischer


Cathartes Aura's picture

nonsense, and you know it.

the "white christian males" may have benefited from their ruling, but please, lets not pretend that the good ole boys club did not favour each other at the EXPENSE of anyone NOT a "white christian male" - your main complaint, and others like you, is that the baton of this privilege has been passed along to others not like you, who don't recognise you as a "superiour" being. . .

on a long enough historical timeline, inevitable, as is your collective bitterness.  welcome to the real world.

Al Gorerhythm's picture

your main complaint, and others like you, is that the baton of this privilege has been passed along to others not like you, who don't recognise you as a "superiour" being. . .

Well constructed and completely true. It is the weakness of the racist; The Blame Game.

smiler03's picture

Every US President in history has claimed to be a Christian.

So your point is what exactly?

Milestones's picture

United States Constitution: Article 1 Section 10 POWERS DENIED INDIVIDUAL STATES.(1) No state shall enter into any treaty, alliance or confederation; grant letters of marque----pass any bill of attender, ex post facto law, or law impairing the right of contract, or grant titles of nobility.

(2) POWERS DENIED INDIVIDUAL STATES EXCEPT BY CONSENT OF CONGRESS. No state shall, without the consent of CONGRESS ----enter into any agreement or compact with another state---.

To my knowledge #2 has not been fullfilled and Congress cannot pass off its constitutional duties to the Executive branch as I have shown in my critique of the Federal Reserve act summarized below.



by Milestones 
on Sun, 11/21/2010 - 14:22


Mr. T., I addressed this issue a couple of times "The Trials and Tribulations of the Federal Reserve Act of 1913" on 6-15-10 and a couple of times later. In fine, let me answer you in brief.

My argument lies in Article 1, Section 8 (5)-Powers of Congress. The Congress SHALL have power: to coin money, REGULATE THE VALUE THEREOF,--". That power was apparently DELEGATED to the Federal Reserve Bank. That DELEGATION of authority to the Federal Reserve is my question. Did Congress have the authority to delegate that authority to "regulate the value thereof"?

Panama Refining Co. v Ryan 293 U.S. 388 1935

"The Constitution provides 'that all legislative powers herein GRANTED SHALL be vested in the Congress of the United States, which shall consist Senate and House of Representatives.'--The Congress MANIFESTLY IS NOT PERMITTED to abdicate or to TRANSFER TO OTHERS the essential legislative functions with which it is vested.---Cannot be allowed  to obscure the limitations of the authority to delegate, if our constitutional system is to be maintained."

Field v Clark 143 U.S. 649 1892

--"The legislative power must REMAIN in the organ where it is lodged by that instrument."

Sovereignty is granted to "We the People" in the first 3 words of the Preamble. As such, under the Constitution, we the people delegate our Sovereign authority to persons to REPRESENT us in day to day dealings. But it is the reserve of the Soverigns to delegate authority not our reperesentatives. John Locke came to the same conclusion.

I would contend that the Federal Reserve Act of 1913 is illegal under the Constitution. Further, if we consider Marbury v Madison of 1803, a decision has stood for over 200 years, the case can be stated in far starker terms:

Marbury v Madison 17 Wall 205 Cranch 2 1803

"Thus the particular phraseology of the Constitution of the United States confirms and strengthens the principal, supposedly to be essential to all written constitutions, that a law repugnant to the constitution is VOID; and the courts AS WELL AS ALL OTHER DEPARTMENTS ARE BOUND BY THAT INSTRUMENT."

Not only did Congress not have the authority to submit such a document as the Federal Reserve Act of 1913; likewise President Wilson had no authority to sign it. See the last sentence of the above.

Yes, I know, the Constitution has been turned into a roll of toilet paper to the 1%ers but that is still the document I still march to as do most others . If that not be the case then we would be far better served now to be comparing an AR-15 to an AK-47.

If those unhappy with the way things are want a change, we must state our concerns and grievances in a fashion that those who are totally uninformed can have a place, a handle so that a nightmare of a 2nd revolution can be avoided. 

There was a ton of groundwork done before Jefferson wrote his magnificent document of 1776. Milestones

hedgeless_horseman's picture



I am with you, friend, but the bold just isn't working. Maybe if you used Xtranormal's cartoon bears, then a few more people might take the time to hear and understand the travesty you portray, Milestones.



BEAR 1: "The legislative power must REMAIN in the organ where it is lodged by that instrument."


BEAR 2: Sovereignty is granted to "We the People" in the first 3 words of the Preamble. As such, under the Constitution, we the people delegate our Sovereign authority to persons to REPRESENT us in day to day dealings. But it is the reserve of the Soverigns to delegate authority not our reperesentatives.

Maybe add some profanity as we Americans find it hard to pay attention unless there is an f-bomb every few sentences.  Possibly there is a nudity option for the bears as well?

Good luck.


Cathartes Aura's picture

. . . and don't forget the farting, amrkns love the farting. . .


Al Gorerhythm's picture

Fart jokes are ALWAYS funny. What's wrong with you?

Omen IV's picture

you said: The same arguments communism makes.

No - the same arguement FASCISM makes - this is one way contract law for an oligarchy which controls the system 

A_S's picture

then why are the oligarchs paying the sheep 26 billon?

oogs66's picture

It's a 10% tithe. A small fraction of what was made and the poorest group should be the easiest to buy off at election time

americanspirit's picture

I have only one thing to say regarding contract law - MF Global

55 men's picture

What is your plan? Short Sale,Foreclosure...Just Curious

tecno242's picture

he can probably sit in it without paying and save crap tons of a money for a year or 2 before they do anything about it.

Silver Dreamer's picture

Just to give you an idea of the time mine took:

We moved out in October of 2009 after being behind on the mortgage on purpose by two months.  BoA said they would not even talk to me until I was behind, so I went ahead and gave up fighting to make the bill (I was going under financially at the time anyway).  Before my credit was ruined though and my family was homeless, I acted in advance to get a rental while my credit was still good.  Once we moved out, we let the bank know and hired a short sale negotiator.  Then over two years the short sale negotiator provided the bank nine different good offers.  All of them were declined by the bank, or the bank sat on the decision long enough that the buyer's contract expired.  After about two and a half years, the place foreclosed even though we did not want it to go to foreclosure.  BoA assured me and the negotiator that it was in an "approved short sale process" and would never be foreclosed on.  It was foreclosed on anyway one month when the negotiator dropped the ball on a response.  Basically, BoA stalled, stalled, and stalled some more until we were at the "fuck it" stage.  Then they sneaked in and foreclosed it.

The obvious fact is to never trust a damned thing they tell you.  It is all lies.  They also must have a strong incentive to NOT let it short sale.  Apparently, it is better for their books to foreclose.  I made no money on the deal because I did not squat in it as others have done.  I highly recommend people NOT squat, even throwing out the moral issues, because you need to have good credit to get a rental in most cases.  If you wait until your credit is effed, then getting a rental will be very difficult (unless you use the money from not paying the mortgage to pay for the entire year's rent in advance perhaps).

Our place was appraised for 130K, and I owed 384K.  For the four years that I paid my mortgage, the bank made 36K a year off me too.  Should I have stayed and waited for the market to recover?  I couldn't afford the payment anymore anyway, but that would have been insane to do.  The neighborhood went from all professionals to section eight housing too, and the crime went through the roof.  When I bought the place, I was single with no debt or medical bills.  When I walked away, I had married, had three children, and had a wife with major medical bills piling up with more medical expenses to come.

I broke the contract, but I did not squat.  I sleep soundly at night too.  What I did any reasonable person would have done.

Edit with two more facts:

I had to maintain mortgage insurance until it foreclosed, and for most of the time I had to maintain the utilities too while it was being shown to prospective buyers.  The bank expected us to still stay in it too, so squating while waiting for it to foreclose is indeed a possibility.  Just be sure you have back up housing when the sheriff finally does come to kick your butt out.

JLee2027's picture

I agree with everything you just said and did.

Henry Chinaski's picture

I agree also. 

A true opportunist would not only have stopped paying and rented elsewhere, but also would have rented out the foreclosing house to someone else.  Which brings up the point that renting is no guaranty that the sheriff won't show up one day and evict you in foreclosure...

Even if you are a good American playing by the rules and meeting your obligations, you have effectively stopped making payments on the mortgage and are maxing out credit cards to buy stuff you don't need, by proxy, thanks to your Federal goverment. 

We are all squatters now. 

seek's picture

Which brings up the point that renting is no guaranty that the sheriff won't show up one day and evict you in foreclosure...

Oh man, you have no idea how true this is, and how many people were doing exactly what you said a true opportunist would do. When my ax and I lived in Scottsdale, AZ back in 2009-2010, we knew people that had been evicted by sherrifs multiple times, in some cases as many as five times -- and not just a couple of folks, dozens. It did get the the point where the people in foreclosure were at least telling the renters the place was in limbo and could get shut down at any time. Given rents, the "landlords" were clearing $25-36K/year, and having someone else pay for utilities and upkeep!

Truly insane.

Sabibaby's picture

So you think it's a good idea to rent the forclosure so some family gets kicked out on the street because they don't know the mortgage isn't getting paid?


 It's so typical in America to make someone else suffer while you gain. I really don't think TPTB are that far off, even a debtor can screw the poor and middle class and not give a crap about it.