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US To Settle Fraudclosure For $25 Billion Even As It Channels Fake Tough Guy In Meaningless Lawsuit Against Very Same Banks

Tyler Durden's picture




 

Remember robosigning and the whole fraudclosure scandal? In a few days you can forget it. Because in America, the cost of contractual rights was just announced, and it is $25 billion: this is the amount of money that banks will pay to settle the fact that for years mortgages were issued and re-issued without proper title and liens on the underlying paper, courtesy of Linda Green et al. Why is this happening? Because staunch hold outs for equitable justice (at least until this point), the AGs of NY and California folded like cheap lawn chairs (we can't wait to find what corner office of Bank of America they end up in), but not before the one and only intervened. From the WSJ: "The Obama administration made a full-court press over the past four days to secure the support of key state attorneys general, including those from Florida, California and New York." Nothing like a little presidential persuasion to help one with overcoming one's conscience. Because in America the push to abrogate the very foundation of contractual agreements comes from the very top. But wait, there's more - just to wash its hands of the guilt associated with this settlement which shows once and for all that the Democratic administration panders as much if not more to the banking syndicate as any republican administration, as it announces one settlement with one hand, with the other the US will sue banks over the mortgage reps and warranties issue covered extensively here, in the most glaringly obtuse way to distract that it is gifting trillions worth of contingent liabilities right back to the banks, not to mention discarding the whole concept of justice. From the WSJ: "Federal securities regulators plan to warn several major banks that they intend to sue them over mortgage-related actions linked to the financial crisis, according to people familiar with the matter. The move would mark a stepped-up regulatory effort to hold Wall Street accountable for its sale of bonds linked to subprime mortgages in 2007 and 2008. At issue is whether the banks misrepresented the poor quality of loan pools they bundled and sold to investors, the people said." Wait, let us guess -that particular lawsuit will end up in a... settlement? Ding ding ding. We have a winner. All today's news succeed in doing is finally wrapping up any and all legal loose ends, so that banks can finally wrap all outstanding litigation overhangs at pennies on the dollar. And if at the end of the day, they find themselves cash strapped, why the US will simply loan them more cash of course.

First, here is the WSJ, on the banks that will benefit from the fraudclosure settlement:

Government officials are on the verge of an agreement worth as much as $25 billion with five major banks, capping a yearlong push to settle federal and state probes of alleged foreclosure abuses by lenders.

 

The deal would represent the largest government-industry settlement since a multistate deal with the tobacco industry in 1998.

 

The agreement covers five banks: Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co., and Wells Fargo & Co. Together, the five handle payments on 55% of all outstanding home loans, or around 27 million mortgages, according to Inside Mortgage Finance.

These are the banks benefitting from Uncle Sam's decision to finally unclog the foreclosure pathway, as banks will no longer have to prove in court they are in fact the title owners.

But just in case popular outrage at this act is a little much, at the same time banks sued over fabricating Reps and Warranties will be: "Ally Financial Inc., Bank of America Corp., Citigroup Inc., Deutsche Bank AG and Goldman Sachs Group Inc." What an odd coincidence: gift with one hand, and take away with the other from virtually all the same banks.

Only it is not really taking away: it is merely putting the wheels in motion that will ultimately result in the same type of settlement that will make a mockery of the legal process in the US, and expose all the state Attorneys General as banker puppets, doing the bidding of the highest bidder... and of Obama of course.

Some more, on the "gifting"

The planned pact would involve around $5 billion in cash penalties, payable to borrowers, states and the federal government. That includes $1.5 billion in cash payments to borrowers who went through foreclosure between September 2008 and December 2011. Borrowers could receive $1,500 to $2,000 each, with the actual amount paid depending on the number of borrowers filing a claim.

 

The agreement is expected to call on the banks to provide $20 billion in other aid—by cutting loan balances for tens of thousands of homeowners and by refinancing thousands of borrowers who are current on their loans but owe more than their homes are worth.

 

Officials say the deal will help provide immediate benefits to around one million homeowners, while raising accountability for banks that work with borrowers facing foreclosure. The foreclosure process has been snarled since late 2010, after allegations that banks had serially submitted bogus mortgage documents when attempting to repossess homes from delinquent borrowers.

Why the push now?

The bank payments would unlock a large new source of housing funding at a time when Congress doesn't appear likely to approve new spending measures to tackle lingering problems facing housing markets, such as a refinance program that President Obama unveiled last week.

30 pieces of silver? Or a corner office.

The three key states overcame misgivings about the plan in recent days, people familiar with the situation said. The inclusion of California is especially important: People familiar with the discussions say the banks would have been willing to pay just $19 billion without the participation of the nation's most-populous state.

 

The office of California Attorney General Kamala Harris declined to comment. A spokeswoman for Florida Attorney General Pam Bondi said that "while Attorney General Bondi has not yet joined the settlement, she is hopeful that a resolution will be reached soon."

The beneficiaries:

"It is frankly a headline victory for both banks and attorneys general with a modest impact on the housing market," said Joshua Rosner, managing director of investment firm Graham Fisher & Co.

 

"It's not new money. It's all soft dollars to the banks," said Paul Miller, a bank analyst at FBR Capital Markets.

And of course, the president, who ends up buying a few cheap votes for $2000 a pop:

Borrowers
could receive $1,500 to $2,000 each, with the actual amount paid
depending on the number of borrowers filing a claim
.

This is also the cost per individual to rescind in perpetuity any actual claims about one's mortgage paperwork. Will Americans go for it? You betcha.

As for the so-called punishment:

In a meeting with reporters last month, Robert Khuzami, the SEC's enforcement chief, said the agency's mortgage-bond investigation was looking for evidence that firms "failed to disclose important information when selling these securities."

 

Mr. Khuzami declined further comment on the investigation.

 

The planned regulatory actions come at a critical juncture. The SEC, Justice Department and state prosecutors are pushing to complete a number of financial-crisis cases by the end of this year, partly to avoid having enforcement action curbed by statutes of limitations, the people said.

In reality all this action will do is provide a benefit for private plaintiffs against banks like Bank of America, such as MBIA, whose case that banks have misrepresented terms of sold securities, will be strengthened. The ultimate cost, however to banks, will be miniscule compared to the fact that the foreclosure pathway will again be unclogged, and the banks are allowed to deficiency mark houses sold from REO, and use fungible excess reserves to plug the difference.

All in all, just a day's work for the administration as it does everything in its power to push the housing market higher at all costs, and further and further away from equilibrium pricing, which is what should be for a true and normal price appreciation to occur... something which will never happen of course as it would take far longer than the 4 years allotted to the president. If the process entails bending the law beyond recognition, so be it.

 

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Thu, 02/09/2012 - 01:03 | 2140704 rustymason
rustymason's picture

Next up on Pay for View: Blythe Masters administers punishment on naughty Jon Corzine. <announcer guy voice>He's gonna payyyyy</announcer guy voice>. Don't laugh, at this point anything is possible in this former banana republic.

And they complain about corruption in Italy, Greece, or Russia? Pleez to gif brreak, Comrade.

Thu, 02/09/2012 - 01:18 | 2140705 cranky-old-geezer
cranky-old-geezer's picture

 

 

So government gets $25 billion spending money and homeowners get the shaft.

Fraudulent foreclosures move on through the courts, homeowner gets kicked out of their home, bank takes it over, state can't do anything, county can't do anything, homeowner can sue but it's a waste of time, federal "settlement" trumps state law.

Criminal and civil immunity isn't just for diplomats anymore, it's for sale to any bank with enough cash to pay Obama's price.

Glad I'm not buying a home.  And certainly glad I don't have equity in one. Banks are gonna go after that equity like crazy now.

This will be the next big down-leg in home prices when twice as many homes around you are foreclosed and empty.

Thu, 02/09/2012 - 01:29 | 2140753 dogismyth
dogismyth's picture

Nailed it, you old geezer!

Thu, 02/09/2012 - 11:35 | 2141766 BidnessMan
BidnessMan's picture

Excellent point.  The irony is amusing - give Bankers a complete release so they can accelerate foreclosures, therefore real estate values plummet because of dramatically increased Supply.  And now most people will realize that Banks don't have to worry about actually complying with their mortgage contract terms and proving ownership of the mortgage after it has been sliced and diced into all kinds of "securities".  They can take your property at most any time for most any reason.  On that basis a lot of folks will pause and reflect whether they want to sign up for a "Heads i Win, Tails You Lose" mortgage.  Real Estate demand will plummet.  Dramatically increase supply and reduce demand.  How is that going to help the real estate market "recover"?

For a deal that was pitched as a way to help the Real Estate market.  Baloney.  A mortgage banking free pass.  Got to keep those financial industry political contributions flowing, and need big banker bonuses for that.  

Thu, 02/09/2012 - 01:11 | 2140718 connda
connda's picture

Crony capitalism at its best.  What else did you expect?  The vast majority of ZH reader knew this would be the outcome.  No surprises!  And here it is.

Thu, 02/09/2012 - 01:22 | 2140727 BlackholeDivestment
BlackholeDivestment's picture

http://bible.cc/luke/9-58.htm 

The Suicide Vampire Squid of The United States Government, who would ever provide labor so it may live in the Slave Masters' White House? What fool would labor the field that does not yield enough to sustain the life of the laborer, much less freedom liberty and justice for all?

The U.S. Government is totally corrupt, bankrupt and lawless. It has no defense. It is offensive and an enemy to everyone. The good people that worked and saved have been sacrificed on behalf of the corrupt. This settlement is exactly represented in the satanic child sacrifice ritual at Boheiman Grove. http://www.youtube.com/watch?v=rAwqvjqAfkQ The fact is, the leaders do not care about life liberty freedom and justice for all, they serve for their own claim of dominion above the Constitution. This is the nature of the new world order global beast. If you accept it's mark, that judgment shall seal you, without mercy you shall perish.

Time is short, and the short term gains of the wicked are about to end suddenly in this generation. This generation will witness the flames. Count on it. Mercy is not mocked.

Thu, 02/09/2012 - 01:23 | 2140739 Aquarius
Aquarius's picture

Look at the Bright side:

Gold and Silver hard will now soon soar

and

Bank share values will collapse

 

There is revolution is the air

you can smell it with the tear gas.

Run Rabbit, run.

 

He be dead jim'.

 

Thu, 02/09/2012 - 01:26 | 2140745 dogismyth
dogismyth's picture

Thanks ZH for bringing this to the readership so late in the game.  As I said a few days ago....where's the ZH story on the robosigning fraud settlement?  Silence.

Timing is everything, and ZH plays its hand just as the other do.

Why bother printing the story now?  To inform us?  A bit late to be outrage or even give a shit.  Its a done deal.  Good job ZH.

Thu, 02/09/2012 - 02:02 | 2140812 slewie the pi-rat
slewie the pi-rat's picture

if you type "robosigning settlement" into the zH "Search" box...

i'll take out any prior to 2011, ok?

...you know, if you're not too busy sticking carrots & kumquats up yer styoooopid asshole so you can eat...

Another Blow For America's Banks (And Bank Of America) After California Kills Robosigning Settlement

settlement appears to be challenged and banks even across the Atlantic are joining in the legal free for all, but the "Linda Green" robosigning affair, which various conflicted attorneys general had held a tenuous grasp over with a settlement in process, has just blown out wide into the open once again, after California ...

Story - Tyler Durden - 10/01/2011 - 07:22 - 131 comments - 0 attachments

The Cost Of Attorney General Silence: How Bank Of America Made Sure There Would Be No Surprises In The Robosigning Settlement

state attorneys general into the “robo-signing” foreclosure scandal. Alas, one look below the surface reveals that we may be days away from a very ignoble and very BAC-friendly settlement, courtesy of a few ... of political corruption and backroom dealing, especially if the settlement outcome is one that will be seen ...

Story - Tyler Durden - 04/23/2011 - 15:50 - 135 comments - 0 attachments

Kiss The Foreclosure Settlement Goodbye: Bank of America, Wells And JP Morgan Are Sued Over Use Of MERS

A little over a year since the day that the world first learned about robosigning and the broader ... that foreclosure settlement goodbye. In the meantime, the  electronic momos keep taking BAC ever higher even ... and "robosigned" by individuals who did not review the underlying property ownership records, confirm ...

Story - Tyler Durden - 02/03/2012 - 11:57 - 122 comments - 0 attachments

First Felony Charges Brought Against Robosigners

Up until now, fraudclosure and robosigning were both merely civil offenses, and as such the banks were actively doing all they could to bury any and all pending litigation under a large settlement ... Services Inc. for allegedly directing and supervising a robo-signing scheme, in which documents filed ...

Story - Tyler Durden - 11/17/2011 - 01:11 - 54 comments - 0 attachments

Back Off Banksters! NY AG Eric Schneiderman Fights Back After Being Kicked Off 50 State Robo-signing Investigation

that Schneiderman, a Democrat in his first term as AG, "has voiced concerns over a proposed settlement between major ... of simply reaching a fast settlement and getting the whole thing over with. In an email to campaign ... following the latest developments related to the national settlement of the mortgage probe, including ...

Blog entry - 4closureFraud - 08/24/2011 - 17:44 - 53 comments - 0 attachments

Foreclosure Fraud | Lender Processing Services Robo-signer Whisleblower Found Dead in Nevada

Is this really a suicide or a warning to others? UPDATE 8:54pm EST: Witness in Alleged Robo-Signing ... The stakes are so high that a settlement is nowhere near to being finalized. Clear title on a shocking number ... or a warning to others?UPDATE 8:54pm EST:Witness in Alleged Robo-Signing Case Dies State witness Tracy Lawrence ...

Blog entry - 4closureFraud - 11/29/2011 - 18:39 - 95 comments - 0 attachments

Banks To Get Away Scott-Free Again? Mass Fraudclosure Settlement To Be Announced Today Without Financial Penalties

legal costs associated with Robosigning (and if JPM is over half a billion, BofA legal invoices ... not surprised to learn that " Bank regulators plan to announce settlements later on Wednesday ... the settlements with some of the largest U.S. banks, including Bank of America Corp, Wells Fargo & Co, ...

Story - Tyler Durden - 04/13/2011 - 09:19 - 180 comments - 0 attachments

Today's Exercise In Wristslapping: Full Text Of Toothless Draft Banker-Regulator Settlement

We haven't read the whole thing. We probably won't. In essence banks promise to never engage in robosigning. Atualy monetary penalty - none ! With every bank signing this form of agreement, ... In essence banks promise to never engage in robosigning. Atualy monetary penalty - none! With every bank ...

Story - Tyler Durden - 04/13/2011 - 12:23 - 132 comments - 0 attachments

PIMCO On The Robosigning Scandal And Its Consequences

settlements are instituted, that the whole fraudclosure issue will be very soon completely forgotten. ... this trend of rapid, automated signing of affidavits “robo-signing” and the ensuing uproar “robogate.” ... structured finance industry to a halt, we are fairly confident that as more and more settlements ...

Story - Tyler Durden - 01/05/2011 - 18:50 - 36 comments - 0 attachments

Massive Wave Of Lawsuits To Be Filed By The US Against America's Biggest Banks As Soon As Tomorrow

a settlement to address abuses by the largest mortgage servicers, including Bank of America, JPMorgan ... Annnnnd.. the Lawyers score bigtime Settlement extraction 101. Settlement extraction 101. TARP ...

Story - Tyler Durden - 09/01/2011 - 21:30 - 386 comments - 0 attachments

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

of banks caught in various acts of robosigning fornication was a joke. According to the WSJ, " ... of a "settlement", and amounts to one quarter in trading perfection for the likes of the afore discussed JPM, BofA ... number to put the entire robosigning affair behind us will be about $10 billion give or take. And banks ...

Story - Tyler Durden - 05/10/2011 - 19:59 - 133 comments - 0 attachments

News That Matters

http://ftalphaville.ft.com/thecut/2011/09/06/669681/us-banks-in-robosigning-settlement-talks/   Eurozone bank sector tensions have increased the volume of euros parked overnight ... http://ftalphaville.ft.com/thecut/2011/09/06/669681/us-banks-in-robosign...   Eurozone bank sector tensions have increased the volume of euros parked overnight ...

Blog entry - thetrader - 09/06/2011 - 01:59 - 3 comments - 0 attachments

Thu, 02/09/2012 - 01:26 | 2140746 dogismyth
dogismyth's picture

Thanks ZH for bringing this to the readership so late in the game.  As I said a few days ago....where's the ZH story on the robosigning fraud settlement?  Silence.

Timing is everything, and ZH plays its hand just as the other do.

Why bother printing the story now?  To inform us?  A bit late to be outrage or even give a shit.  Its a done deal.  Good job ZH.

Thu, 02/09/2012 - 01:58 | 2140806 slewie the pi-rat
slewie the pi-rat's picture

if you type "robosigning settlement" into the zH "Search" box...

i'll take out any prior to 2011, ok?

...you know, if you're not too busy sticking carrots & kumquats up yer styoooopid asshole so you can eat...

Another Blow For America's Banks (And Bank Of America) After California Kills Robosigning Settlement

settlement appears to be challenged and banks even across the Atlantic are joining in the legal free for all, but the "Linda Green" robosigning affair, which various conflicted attorneys general had held a tenuous grasp over with a settlement in process, has just blown out wide into the open once again, after California ...

Story - Tyler Durden - 10/01/2011 - 07:22 - 131 comments - 0 attachments

The Cost Of Attorney General Silence: How Bank Of America Made Sure There Would Be No Surprises In The Robosigning Settlement

state attorneys general into the “robo-signing” foreclosure scandal. Alas, one look below the surface reveals that we may be days away from a very ignoble and very BAC-friendly settlement, courtesy of a few ... of political corruption and backroom dealing, especially if the settlement outcome is one that will be seen ...

Story - Tyler Durden - 04/23/2011 - 15:50 - 135 comments - 0 attachments

Kiss The Foreclosure Settlement Goodbye: Bank of America, Wells And JP Morgan Are Sued Over Use Of MERS

A little over a year since the day that the world first learned about robosigning and the broader ... that foreclosure settlement goodbye. In the meantime, the  electronic momos keep taking BAC ever higher even ... and "robosigned" by individuals who did not review the underlying property ownership records, confirm ...

Story - Tyler Durden - 02/03/2012 - 11:57 - 122 comments - 0 attachments

First Felony Charges Brought Against Robosigners

Up until now, fraudclosure and robosigning were both merely civil offenses, and as such the banks were actively doing all they could to bury any and all pending litigation under a large settlement ... Services Inc. for allegedly directing and supervising a robo-signing scheme, in which documents filed ...

Story - Tyler Durden - 11/17/2011 - 01:11 - 54 comments - 0 attachments

Back Off Banksters! NY AG Eric Schneiderman Fights Back After Being Kicked Off 50 State Robo-signing Investigation

that Schneiderman, a Democrat in his first term as AG, "has voiced concerns over a proposed settlement between major ... of simply reaching a fast settlement and getting the whole thing over with. In an email to campaign ... following the latest developments related to the national settlement of the mortgage probe, including ...

Blog entry - 4closureFraud - 08/24/2011 - 17:44 - 53 comments - 0 attachments

Foreclosure Fraud | Lender Processing Services Robo-signer Whisleblower Found Dead in Nevada

Is this really a suicide or a warning to others? UPDATE 8:54pm EST: Witness in Alleged Robo-Signing ... The stakes are so high that a settlement is nowhere near to being finalized. Clear title on a shocking number ... or a warning to others?UPDATE 8:54pm EST:Witness in Alleged Robo-Signing Case Dies State witness Tracy Lawrence ...

Blog entry - 4closureFraud - 11/29/2011 - 18:39 - 95 comments - 0 attachments

Banks To Get Away Scott-Free Again? Mass Fraudclosure Settlement To Be Announced Today Without Financial Penalties

legal costs associated with Robosigning (and if JPM is over half a billion, BofA legal invoices ... not surprised to learn that " Bank regulators plan to announce settlements later on Wednesday ... the settlements with some of the largest U.S. banks, including Bank of America Corp, Wells Fargo & Co, ...

Story - Tyler Durden - 04/13/2011 - 09:19 - 180 comments - 0 attachments

Today's Exercise In Wristslapping: Full Text Of Toothless Draft Banker-Regulator Settlement

We haven't read the whole thing. We probably won't. In essence banks promise to never engage in robosigning. Atualy monetary penalty - none ! With every bank signing this form of agreement, ... In essence banks promise to never engage in robosigning. Atualy monetary penalty - none! With every bank ...

Story - Tyler Durden - 04/13/2011 - 12:23 - 132 comments - 0 attachments

PIMCO On The Robosigning Scandal And Its Consequences

settlements are instituted, that the whole fraudclosure issue will be very soon completely forgotten. ... this trend of rapid, automated signing of affidavits “robo-signing” and the ensuing uproar “robogate.” ... structured finance industry to a halt, we are fairly confident that as more and more settlements ...

Story - Tyler Durden - 01/05/2011 - 18:50 - 36 comments - 0 attachments

Massive Wave Of Lawsuits To Be Filed By The US Against America's Biggest Banks As Soon As Tomorrow

a settlement to address abuses by the largest mortgage servicers, including Bank of America, JPMorgan ... Annnnnd.. the Lawyers score bigtime Settlement extraction 101. Settlement extraction 101. TARP ...

Story - Tyler Durden - 09/01/2011 - 21:30 - 386 comments - 0 attachments

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

of banks caught in various acts of robosigning fornication was a joke. According to the WSJ, " ... of a "settlement", and amounts to one quarter in trading perfection for the likes of the afore discussed JPM, BofA ... number to put the entire robosigning affair behind us will be about $10 billion give or take. And banks ...

Story - Tyler Durden - 05/10/2011 - 19:59 - 133 comments - 0 attachments

News That Matters

http://ftalphaville.ft.com/thecut/2011/09/06/669681/us-banks-in-robosigning-settlement-talks/   Eurozone bank sector tensions have increased the volume of euros parked overnight ... http://ftalphaville.ft.com/thecut/2011/09/06/669681/us-banks-in-robosign...   Eurozone bank sector tensions have increased the volume of euros parked overnight ...

Blog entry - thetrader - 09/06/2011 - 01:59 - 3 comments - 0 attachments

Thu, 02/09/2012 - 01:29 | 2140752 Vendetta
Vendetta's picture

Travesty meets justice, the status quo remains

Thu, 02/09/2012 - 01:43 | 2140782 digalert
digalert's picture

Remember? I remember '08 when foreclosure was all the rage. Gotta help the people from losing their homes. Remember them? So the criminal CONgress came up with Toxic Asset Rescue Plan (TARP) later changed to Troubled asset...toxic was a bit harsh language for the crap. $700 billion which shifty Paulson and the Bernank converted to 2 trillion, to be distributed to banksters around the globe. Now nobody has gone to jail and the fucking banksters get a $25 billion slap on the wrist. Yeah, we remember...jump you fuckers!

Thu, 02/09/2012 - 02:17 | 2140838 lolmao500
lolmao500's picture

Whoever wants justice is a terrorist according to the FBI.

Thu, 02/09/2012 - 02:39 | 2140864 Illya Kuryakin
Illya Kuryakin's picture

Today's game -   1%    1

                      99%    0

Thu, 02/09/2012 - 02:47 | 2140872 aerial view
aerial view's picture

Repeat after me: From this day forward, I solemnly swear to never again trust the big banks with any of my money and to teach my children and friends to "starve the beast" before it completely enslaves them.

Thu, 02/09/2012 - 03:06 | 2140882 Rearranging Dec...
Rearranging Deckchairs's picture

Question: Does anyone really know what the explicit terms of the settlement are? I mean how could a state attorney general totally abrogate the real estate law going forward. I can see an A.G. deciding to drop a suit regarding practices in the past. But I don't see how the proverbial genie isn't out of the bottle regarding ongoing foreclosures. All you have to do is challenge a bank's standing to foreclose and demand proof that the mortgatge was assigned etc. I mean only a state legislature can change the evidence code, common law standing rules etc.

How does this solution prevent joe six pack from challenging the bank re that they have standing to foreclose as owner? I mean if the banks couldn't find the paperwork before how are they going to find it now?

 

For Christ's sake Chase couldn't even get two properties of a client's reconveyances to the client when the mortgages were paid off. FYI if you actually pay off a mortgage make sure the shitty lender actually records some sort of reconveyance aka deed of release aka release of mortgage etc. Cause if they couldn't get their paperwork in order to properly foreclose on a secutiry interest what makes you think the same bank employees are going to do a decent job clearing up the lien.

 

I am not sure that this settlement really opens the floodgates as far as the shadow inventory. It may be a painful slog especially in state's which require a judicial foreclosure. What I think it does do is put a dollar figure on heretofore speculative lititgation reserves on the banks balance sheets.  Even with the $2000 or so settlement amount might a former home owner not be better off with a private fraud cause of action against a bank where it fraudulently foreclosed assuming said former homeowner is within the statute of limitations.

Thu, 02/09/2012 - 08:42 | 2141036 Implicit simplicit
Implicit simplicit's picture

The goverment uses "in the interst of national security" as the the beginning and ending premise to abscond citizens rights. This case will prove no different. The banks must be saved for national security is the primary false premise. The rest of the fraud flows easily from that spout.

Thu, 02/09/2012 - 03:45 | 2140907 lincolnsteffens
lincolnsteffens's picture

I'm done. The takeover by the Oligarchs of the USA is now complete. It is time to delete my facebook account. Maybe I'll not return to posting anymore on ZH. Every man for himself. Good night and watch your  back.

Thu, 02/09/2012 - 07:45 | 2140925 Wakanda
Wakanda's picture

When contract law dies, all bets come off the tables.

Cash in your chips because the casino is about to close.

The streets outside are not looking very friendly either.

Thu, 02/09/2012 - 06:41 | 2140930 hyper-critical
hyper-critical's picture

Tyler - absolutely phenomenal job on this issue. You should be winning awards for your journalistic efforts here, not be chastized as a fringe blog.

When it comes to the global monetary system, I've gotten to the point where if I don't laugh, I'll cry. I've dealt with it emotionally, and gotten to that crucial point of acceptance. But how this mortgage settlement is playing out is fucking disgusting. The way these AG's are rolling over...when are they going to securitize integrity to I can short the hell out of it?

When you remove the veil, cut the bullshit, and call things like they are, in many ways this is the most totalitarian system in history. And if it isn't now, it will be soon. When zerohedge wouldn't load for about 15 minutes this morning, my first thought was the Fed watchdogs had shut it down. Part of me is paranoid visiting this site, even with an IP scrambler, as frequently as I do.

Fortunately, I work for an indepednent investment firm, and my bonus cheque cleared on Monday. Time to buy some fucking guns.

Thu, 02/09/2012 - 06:57 | 2140938 Watson
Watson's picture

Probably I misunderstand, but isn't the really big deal in the issue of banks not following legal process correctly:
*Not* how large a penalty the state should impose on banks for not following the rules;
*But actually* the rights of those who bought MBS and other securities from the banks, where the underlying titles are defective.

Any settlement between the US government and the banks does not affect the rights of the security holders.

Personally, I think it would be simpler just for the security holders to demand that the banks repurchase the defective titles at original cost (which would cripple the banks), but I guess (not a US lawyer) that the holders could, in the alternative, sue for the losses caused by the defective titles (which would also cripple the banks).

Please, what am I missing?

Thu, 02/09/2012 - 08:33 | 2141018 Implicit simplicit
Implicit simplicit's picture

The issue is the lack of past and  future recourse to litigants for the crimes committed  surronding robo-signing. Now the Fed can buy all the toxic assets on its own and/or through the GSEs. This will allow the banks to not have to admit the true vauue of the homes in foreclosure.

This seems to be the next fraudulent step to bail out the banks again without the public knowing what is going on. This will all help support Obamanation's plan for extend and pretend with a new HAMP or HARP or whatever the next mortgage relief program will be to try and prevent more foreclosures. he will be offerring a new program as the election draws near.

 

Thu, 02/09/2012 - 10:00 | 2141281 PMakoi
PMakoi's picture

That reads like a move in a game of chess.  Excellent point, and a logical step by the Banksters.  They're holding tons of junk that dare not be marked to market, and if they can off it onto the Government using their own Bankster bookage, the Govt. gets stuck with selling the house and kicking the squatters out.  Govt. takes the brunt of dissatisfaction (again).  Banksters continue to rape and pillage.

I just want to die in a lawn chair sitting on a beach watching the sunset... with cold beer.

Thu, 02/09/2012 - 09:45 | 2141223 Implicit simplicit
Implicit simplicit's picture

From Naked Capitalism: http://www.nakedcapitalism.com/2012/02/the-top-twelve-reasons-why-you-should-hate-the-mortgage-settlement.html

The mortgage settlement terms have not been released, but more of the details have been leaked:

1. The total for the top five servicers is now touted as $26 billion (annoyingly, the FT is calling it “nearly $40 billion”), but of that, roughly $17 billion is credits for principal modifications, which as we pointed out earlier, can and almost assuredly will come largely from mortgages owned by investors. $3 billion is for refis, and only $5 billion will be in the form of hard cash payments, including $1500 to $2000 per borrower foreclosed on between September 2008 and December 2011.

Banks will be required to modify second liens that sit behind firsts “at least” pari passu, which in practice will mean at most pari passu. So this guarantees banks will also focus on borrowers where they do not have second lien exposure, and this also makes the settlement less helpful to struggling homeowners, since borrowers with both second and first liens default at much higher rates than those without second mortgages. Per the Journal:

 

Thu, 02/09/2012 - 07:16 | 2140948 Snakeeyes
Snakeeyes's picture

What a heated debate (or lynching).

Robosigning was bad, but how were borrowers harmed? They defaulted on their loans. The lenders actually suffered the loss.

You can be angry at the banking system, but this settlement doesn't get to the real issues (e.g., TBTF, Fannie/Freddie's role, etc). It is twisted justice.

http://confoundedinterest.wordpress.com/2012/02/09/25-billion-attorney-general-settlement-the-wrath-of-cordray/

Thu, 02/09/2012 - 07:35 | 2140958 El Hosel
El Hosel's picture

 Full-court press .....Operation "secure support obscure justice".... The war on those opposing the hosing.

Thu, 02/09/2012 - 08:09 | 2140980 Implicit simplicit
Implicit simplicit's picture

Those involved have had lots of practice at playing high on fraud.

The full court press, pressing the metal to settle,

worshipping false truths and confidence-less Gods

Uncomfortably numb

 

Thu, 02/09/2012 - 09:00 | 2141074 Miss Expectations
Miss Expectations's picture

And I thought it wasn't possible to type with your head up your ass.  I was wrong.

Thu, 02/09/2012 - 12:11 | 2141956 Ned Zeppelin
Ned Zeppelin's picture

You couldn't be more wrong, or more accurately, more misinformed as to exactly  what robosigning is. It is intentionally criminal behavior, period. There are already consequences built in to the system if you default and take on too much house.  Losing your credit rating is just the start. But it's not criminal behavior, it's just stupidity -  for every gullible borrower who misrepresnted their income on a credit app, there is an unscrupulous mortgage broker on the other side saying, "trust me, just sign here, it's all filled out. . . "

This settlement papers over systemic criminal activity orchestrated by people who knew better but did it anyway.  They are mocking thier defenders for their stupidity.

Have a cigar, and celebrate the further spread of corruption in our system.

Thu, 02/09/2012 - 12:20 | 2141989 FeralSerf
FeralSerf's picture

"Robosigning was bad, but how were borrowers harmed?"

How can anyone be so fucking stupid? The Fifth Amendment to The Constitution (yeah, I know the Constitution is "just a goddamn piece of paper per presidential proclamation, but I'm still a bit nostalgic):

". . .nor shall any person . . . deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."

Thu, 02/09/2012 - 12:30 | 2142061 Chump
Chump's picture

You stupid fuck.  Robosigning created millions of clouded titles that won't be resolved for decades.  Robosigning was a blatant disregard for black letter law.  "How were the borrowers harmed?"  I hope you're not pimping your own blog with that link, because I'm shocked a dunce like you can even figure out how to submit a comment, much less post a blog.

BRING BACK CAPTCHA!

Thu, 02/09/2012 - 07:34 | 2140957 gookempucky
gookempucky's picture

WOW another shit sandwiche for the folks and nothing to wash it down---just choke bitchezzzzz.

AA has problem with pension plan----apparently secure monthly checks have already been cashed uh stolen.

http://www.reuters.com/article/2012/02/08/us-column-miller-idUSTRE81718S20120208

zign zee paapiers alt man.

Thu, 02/09/2012 - 08:08 | 2140975 MFL8240
MFL8240's picture

Hope the goverment plans on lending these gangsters the $25 Billion, that would be the final straw to a completely fraudulent game.

By the way, what right does any goverment have to settle personal claims?  The answer is NONE!

Thu, 02/09/2012 - 08:16 | 2140996 SmoothCoolSmoke
SmoothCoolSmoke's picture

Capitalist crooks win.  Same as it ever was. Somewhere (presumibly Hell) the old "Captians of Industry" are smiling.

Thu, 02/09/2012 - 08:24 | 2141006 lesterbegood
lesterbegood's picture

It appears that we have become a nation of robots...

Thu, 02/09/2012 - 08:46 | 2141044 ZeroPoint
ZeroPoint's picture

Obama's 'full court press' - Give in or you and your children are declared 'combatants'.

Thu, 02/09/2012 - 08:56 | 2141068 ZeroPoint
ZeroPoint's picture

So what about the people who were pushed out of their homes due to the fraud? Does the bank get the keep house and whatever equity was paid into it?

If the answer is yes, Obama has just paved the way for corporations to steal anyone's property, at any time.

 

Thu, 02/09/2012 - 11:17 | 2141636 BidnessMan
BidnessMan's picture

Swept under the carpet and forgotten.  Rules only apply to the Little People.  This is all fluff and window dressing.  A few token people might see a check for $1,500, but not many.  So much for the "Justice" system and following the rules. 

Thu, 02/09/2012 - 09:11 | 2141100 Catullus
Catullus's picture

$25Bn fee for a $7trillion dollar mortgage industry.  3% is the O&M for fraud now.  Model it in.

Thu, 02/09/2012 - 09:43 | 2141195 chunga
chunga's picture

This is really not surpising.

Considering the fact that congress is holding a debate as to whether or not they should be allowed to engage in insider trading, the charade put on by the AGs is and always was political grandstanding.

I'll be speaking with several excellent and succesful attorneys today who engage in this highly nuanced and technical area of legal practice.

It will be interesting to get there "take" on this; and what impact it may or may not have on their own cases presently in litigation.

I'll go out on a limb and guess that on an individual level it is those who did not, or could not, retain competent legal counsel on their own who will be hurt most.

This gal here is preparing a Press Release and intends to bring many facts to light by week's end.

I'm hoping she gets support from those of us on Zero Hedge. (Hey Tyler, Senator Moura sure could use a spotight here)

FWIW...I've remained in contact with the feisty freshman and will do my best to spread the word here and on little Hamlet.

R.I. Senator Moura Complaint To The Department of Treasury RE: Wells Fargo

URGENT FAX FROM RI SENATOR MOURA TO SENATOR JACK REED

I DEMAND THIS BE PUT TO AN END, AND SANCTIONS IMPOSED FOR WHAT I PERCEIVE TO BE TWO CRIMINAL ORGANIZATIONS.

For Immediate Release FROM Senator Bethany Moura [R-RI] Jan. 10, 2012

Freshman RI Senator levels serious allegations at Fannie Mae & Freddie Mac - Jan. 10, 2012

Thu, 02/09/2012 - 10:26 | 2141385 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

If I understand correctly, what this deal means to me is that I get to pay higher banking fees going forward, and folks who bought more home than they could afford get cash settlements or get their mortgage modified to their benefit.

Nice.  I hate gubmint.

Thu, 02/09/2012 - 11:29 | 2141719 lex nulla
lex nulla's picture

Deckchair:

"All you have to do is challenge a bank's standing to foreclose and demand proof that the mortatge was assigned etc. I mean only a state legislature can change the evidence code, common law standing rules etc."

If only this were true.  Can't find representation that will, for my sis.  There are fine defenses - not underwater, not delinquent when the foreclosure was filed, bank foreclosing but freddie says they own the note, escrow hanky panky, on and on.....

Present atty has behaved as nothing more than a loan broker.  Every "solution" has to do with entering into another loan, no defense allowed.  Discovery docs not in the record, bank didn't provide anything asked for.  Atty says they refuse unless shown a pile of money. Then they just take that money also and still throw you overboard.

Whisky.  Tango.  Foxtrot.  It's clear.  They cannot possibly buy "justice" for any reasonable amount.  Atty after atty has sold 'em down the river.

They've fallen for the line that the best they can hope for is to walk away with 5-10K.  This after $30K down in 2003 and every payment since then.

I have an hour long tape of atty telling them the most outrageous lies.  You really must hear this shit to believe it.

'Scuse, gotta go barf.

 

 

 

Thu, 02/09/2012 - 12:05 | 2141922 Ned Zeppelin
Ned Zeppelin's picture

A completely expected national disgrace.  Lady Justice has been cornholed by a gang of HIV-positive banksters, at the urging of her pimp politicians, sans lubricant.

The noose grows tighter, and still we are locked on American Idol and cheez doodles.  As goes Greece, so will we in time.  Docile sheep. 

Thu, 02/09/2012 - 12:06 | 2141923 mccoyspace
mccoyspace's picture

This is merely a follow-on from the already-decided fact that the banks are Too Big To Fail.

The Government and the Banks are one, laws and citizens be damned.

The above statement doesn't mean that I like it, or that I support it, but I'm not suprised.

Vive La Resistance 

 

Thu, 02/09/2012 - 16:04 | 2143250 malek
malek's picture

Tyler, where do you take/derive the statement

"[...] as banks will no longer have to prove in court they are in fact the title owners."

from?

Does this apply to ongoing foreclosures only, or also to future foreclosures?

Thu, 02/09/2012 - 17:11 | 2143530 dizzyfingers
dizzyfingers's picture

"Does this apply to ongoing foreclosures only, or also to future foreclosures?"

Does it matter? Why? They'll do whatever they want and apparently they can't be stopped.

Thu, 02/09/2012 - 17:10 | 2143523 dizzyfingers
dizzyfingers's picture

Worse, worst, worser, worsest...what's after that?

Sat, 02/11/2012 - 07:43 | 2148926 falga
falga's picture

This way foreclosure can resume and we are all a very happy family. Whoever doubted whose side was Obama has the answer with this swiftly undemocratically negotiated settlement. This is the coup de grace. Boycott bank stocks! Let's see how they like this treatment. Surely America was royally screwed on this as clearly banks do not have the promissory notes on millions of mortgages they illegally bundled and sold to investors for insane profits.

Wed, 02/29/2012 - 20:30 | 2210426 oleander garch
oleander garch's picture

On the Mortgage Fraud Settlement, Oli Garch tells you how easy Banks got away with fraud. http://www.thenakedemperor.com/oligarch/mortgage-fraud-settlement

Wed, 02/29/2012 - 20:30 | 2210427 oleander garch
oleander garch's picture

On the Mortgage Fraud Settlement, Oli Garch tells you how easy Banks got away with fraud. http://www.thenakedemperor.com/oligarch/mortgage-fraud-settlement

Do NOT follow this link or you will be banned from the site!