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And because Wall Street controls the message, drowning out the facts, most people are going to believe that this is just too complicated to resolve and that $20 billion is better than nothing. Actually it isn’t. By going that low, we are assuring the mutual destruction of virtually every state and local budget for decades to come. We are assuring the impossibility of a jobs recovery. We are finally giving Wall Street our unconditional surrender to their supreme right of governance.– Neil Garfield

EDITOR’S NOTE: The talk is a settlement of $20 billion. They don’t want to correct the principal balances to fair market value, which would be taking 15%-75% of every loan out of Wall Street’s pocket when they misrepresented the value of the property. The reason they say is that it would be windfall reward for stupid greedy homeowners who simply made a bad deal and now can’t or won’t pay for it.

But they WILL take a total of .01% out of their pockets and call it a day. So for every $20,000 they stole the “big” settlement is going to be that they have to put 2 cents on the table. So the windfall reward for being stupid, fraudulent, and greedy goes to and stays with Wall Street.

Collectively we have all lost around $20 trillion when you put pencil to paper and figure out the losses to the taxpayers, homeowners, pensioners, federal, state and local governments. And the AG’s think that 2 cents is enough because when you do the multiplication $20 billion sounds like a big number. Well, it doesn’t sounds big to me. It may be good politics and PR but it doesn’t do anything for the housing market, the consumer, the economy, or our standing in the world of finance.

If there was any doubt in your mind about who is running the show, think about how the attorneys general of all 50 states could agree for all the states to accept the bankruptcy of their citizens, and their federal, state and local governments. Seems to me that the Tobacco company settlement was more than 10 times that amount and the computed losses were much lower to the states — because they didn’t have the clout. The banks have the edge here not because of unequal bargaining but because there wasn’t any bargaining at all. The whole script, like everything else, was choreographed and carefully written by Wall Street.

And because Wall Street controls the message, drowning out the facts, most people are going to believe that this is just too complicated to resolve and that $20 billion is better than nothing. Actually it isn’t. By going that low, we are assuring the mutual destruction of virtually every state and local budget for decades to come. We are assuring the impossibility of a jobs recovery. We are finally giving Wall Street our unconditional surrender to their supreme right of governance.



Foreclose Deal Near, State Officials Say


NY Times

WASHINGTON — A broad agreement could be struck within two months to overhaul how millions of foreclosures are handled by the nation’s biggest banks and to expand the use of home loan modifications, according to Tom Miller, the attorney general of Iowa.

All 50 state attorneys general, along with federal regulators, have been stepping up pressure on the mortgage servicers over their foreclosure lapses in recent days and presented them with an outline of a settlement late last week. But when Mr. Miller made his comments at a press conference here on Monday, it was the first time officials have said when an agreement might come.

“I’m hoping we can wrap it up in a couple of months,” he said. “That’s a hope, but we’re going to move as fast as we can.”

There have been reports that a broad settlement with the banks was imminent, but Mr. Miller played down that prospect, citing thorny issues like the question of just which homeowners should benefit from the proceeds of any settlement.

The attorneys general and federal government agencies are pressing for a financial settlement that could total over $20 billion. When asked about these estimates, Mr. Miller and three other attorneys general declined to comment on Monday.

While the attorneys general and the newly created Consumer Financial Protection Bureau support such a fund for homeowner relief, there has been growing criticism of the government’s existing program to modify mortgages, known as the Home Affordable Modification Program. Last week, Republicans in the House pushed to kill the program, which has helped far fewer homeowners than promised.

A fund with at least $20 billion would represent a sharp expansion of modification efforts for the more than four million Americans facing the loss of their homes.

Many more Americans have mortgage loans that exceed the value of their homes because of falling housing prices, and critics warn that if an aid program is too generous, it could encourage borrowers to walk away from their homes.

Mr. Miller said the attorneys general were “very concerned of people taking advantage” of any program intended to help people facing the loss of their homes.

What is more, determining exactly who to help will be a “hot point” as various government regulators and the attorneys general try to reach a settlement with the banks, according to Roy Cooper, the attorney general for North Carolina.

“We don’t want to stop foreclosures on homes that should be foreclosed,” Mr. Cooper added, a tacit acknowledgement that too broad a modification effort could cause the housing market to grind to a halt, and delay any broad recovery in home prices for several years.

Major servicers, including Bank of America, Citigroup, Wells Fargo and JPMorgan Chase, all declined to comment last week. However, in recent financial filings with the Securities and Exchange Commission, several big banks warned that the continuing regulatory investigations could have a significant effect on their results.

As expensive as a settlement could be for the big banks, industry lobbyists in Washington privately say that they are eager to put the issue behind them, especially given the public relations fallout from a protracted fight with the government.

And though the banks have said that the number of actual victims of foreclosure abuses is small, it is likely that any settlement will force them to acknowledge broader problems with their procedures.

“The servicers themselves acknowledge there have been very serious problems in foreclosure servicing,” said John Suthers, the attorney general of Colorado. “They know there are problems.”

Since last fall, the nation’s biggest mortgage servicers have been under investigation by all 50 state attorneys general, after a nationwide furor was set off by revelations that documents in many foreclosure cases were signed with only a cursory review, a practice known as robo-signing.

Settlement talks are running on two tracks. The attorneys generals, backed up by a host of federal agencies, last week presented the five biggest mortgage servicers with a 27-page draft settlement proposal that could profoundly change how homeowners in default are treated.

The attorneys general, the federal consumer bureau and the Federal Deposit Insurance Corporation are also pushing for a large monetary settlement from the servicers. Much of that money would be used to modify the loan terms for borrowers who are delinquent or facing foreclosure, perhaps reducing the interest rate or the principal to lower monthly payments.

But regulators disagree over how big that settlement should be. The Office of the Comptroller of the Currency and the Federal Reserve do not favor as large a penalty as the attorneys general and the consumer bureau do.

In addition, Mr. Miller admitted that it was not always clear who had final say in the negotiations. “Nobody’s driving the bus,” he said. “Nobody really has the lead or is in control of this. It’s a real joint effort.”

Under the blueprint presented last week, banks would be prohibited from starting foreclosure proceedings while a borrower was actively trying to lower the interest rate or ease other terms of the home loan.

Any borrower who successfully made three payments in a trial loan modification would be given a permanent modification. When a modification was denied, it would be automatically reviewed by an ombudsman or independent review panel. In addition, banks would have to reward their employees for pursuing modifications over foreclosures, while late fees would be curtailed.

28 Responses

  1. […] SEE taking-justice-off-the-table-2-cent-settlement […]

  2. […] SEE taking-justice-off-the-table-2-cent-settlement […]

  3. […] was WRONG), and the 50 states full court press from the financial lobbyists trying to get the TWO CENT SETTLEMENT through, the public is getting a full dose of just how corrupt our government has become from the […]

  4. […] was WRONG), and the 50 states full court press from the financial lobbyists trying to get the TWO CENT SETTLEMENT through, the public is getting a full dose of just how corrupt our government has become from the […]

  5. Okie:

    In the 80’s those ole boys had children who have now grown up and didn’t learn a thing about how rooking and crooking seemed to be the name of the game. Now their children are in the business and so it goes.

    Yes, now your children need instruction more than ever about the ways and means of the financial society. The good and the bad.





  7. Ian,

    Everything you state on good bank/bad bank – is exactly on point. Even commentator who reported this information — had his suspicions. Most important is — “the loans were supposedly deposited into the trusts, so what gives here”.

  8. ANONYMOUS- BOA’s good/bad bank is, as you note,suspicious. There is no mention of whether or not this includes Countrywide’s loans,which supposedly constitute the bulk of BOA’s bad loans. But I would think that they should be broken out separately. And,the loans were supposedly deposited into the trusts, so what gives here. Who is going to monitor and report publicly on the status of the bad bank performance? Probably no one,save for a few months of comments,after which the mainstream media will move on to the next issue. Perhaps the nonperforming or underperforming loans in the bad bank are all the phantom loans which were sold to the GSEs, or the loans which were sold many times over to investors worldwide. This arrangement would enable BOA/CW to reduce the payouts,foreclose on the majority, and sweep the remainder under the rug. We may never know. Or, the bad bank loans may be all the loans laundered through MERS. I had posted a question regarding the banks’ “losses” almost two years ago- “if the loans were in trusts,and the investors take the losses,then how are the banks claiming losses also? Granted,I know that the banks are holding a percentage of the loans on their balance sheets,but not enough to require the govt. to panic and provide trillions of dollars in cash injections,zero interest loans, and loan backstops. It didn’t make sense then, and doesn’t make sense now.

  9. It will, unfortunately, get much worse. The numbers of up and coming foreclosures will climb higher than what’s in the press is leading us to believe. Job losses continue, gas prices go up up up, utilities triple and quadruple, health care costs keep rising, food prices keep rising, basic living costs keep rising and salaries and benefits of the middle class people are being sucked away from them whether or not there is a financial need by the companies.

    Companies keep outsourcing jobs and hiring illegal workers for the sole purpose of paying less and making more. I have heard the arguments about illegal workers taking over the jobs and the country. If illegals were not being hired by employers illegally, there would be no jobs, no money and the problem would resolve on its own. The claim that Americans would not take these jobs is just as much BS as the BS the banks are dishing out. They just wouldn’t take them at slave wages. I am sick sick sick and tired of the greed greed greed that goes on and is allowed to take this country down. However, all of the above are factors in a declining economy where so many people that have such a large percentage of income vested in their monthly mortgage payments….the damn has only cracked and as yet to burst. But beware, burst it will.

  10. An interesting part of the 27 page “settlement” is the referral to loan mods under the Net Present Value calculations. The “Settlement” requires that servicers comply with NPV calculation for loan mod determination.

    Now, anyone familiar with NPV (time value of money) – knows that NPV can be manipulated by inputs. For example, if a higher interest rate is used to calculate – NPV will be lower. And, if a lower interest rate is used – NPV will be higher. Easy manipulation to quantify NPV — as servicer wishes.

    And, if collection rights have been sold — must input an “outflow” (price paid) into NPV calculation — which would greatly reduce the NVP. Any way they like it — the NVP can be calculated to deny a loan mod – because the “NPV” of a loan mod can always be manipulated to be lower than the present value of a foreclosure.

    Aside from above NPV calculations — it has never made any sense to me as to why “banks” would prefer to “sell” a foreclosed home — at a much “underwater” price – to a new homebuyer — rather that just modify the loan – principal reduction intact – for the current homeowner. MAKES ZERO SENSE — but, of course, the “banks” have agreements and contracts they CANNOT break. And, they have no actual say in calculating NPV — under any means, method, or manipulation.

    More of the same – “discretionary” judgment by servicers in the AG ‘settlement.”. AGs could not open up (subpoena) records before settlement. AGs have no authority — was up to OCC and FTC. So — how is it that AGs are attempting negotiation — without investigation??

    In addition, new news today — made stock market go up — that BofA is going to separate it’s divisions into “good bank”/”Bad bank”. That is, going to move all “owned” “bad” loans – to the “bad” bank. (Hunh?? thought these loans were in trusts????) Says that they will work out issues within 36 months. BofA also says that mortgage lending is improving. Stock market loved this –good day for the market..

    Now — good bank/bad bank — what is BofA’s contracts — and disposal method?? Also, market reported Citigroup did the same — Citi sold off divisions and loans — to hedge funds/debt buyers. That is how Citi “recovered.” BofA — needs to open records before they set up “good bank/bad bank”.

    But, accounting gimmicks is not up to borrowers to challenge – this is up to regulatory authorities. Just do not like that AGs are trying to settle homeowner complaints– without any regulatory investigation..

  11. let me try again:

    [youtube http://www.youtube.com/watch?v=yipV_pK6HXw?rel=0&w=640&h=390%5D

  12. The AG’s are concerned that “people” may abuse and commit fraud with any program designed to help home owners in trouble???????? are you Fu**(*(*ng kidding me?? are these idiots for real?? afraid that people, us? the ones that got screwed by the banks will or would defraud the thieves???? absolutely AMAZING!!!!!!!!!

  13. Well, here is at least some good news (on the TILA front):

  14. In 2005 I am sure hundreds of people went to the AG to get help with investigating their issue and they got a standard letter telling them that the AG’s work for the masses so to speak.


    Yes, you are so correct. This is sick and I said it time and again. The AG’s started betraying us back in early 2004 and 2005.

    Some of those people who were unprepared to file a proper complaint (too much work for the AG) so they eventually made it over to us. Telling the same story that the AG’s had no intention of helping them do anything. Thus, no law enforcement because they did not want to do their job and it would interfere with the political agenda’s to support the best interest of the banks.

  15. If our AG’s agree to this, then we have no law, and chaos is much closer than we think. Good night and good luck. We have been betrayed.

  16. I’d like to know who raised these people. Do they not have a conscience that eats them alive? I’m being totally serious, I could never live with myself, if I knew my decision influenced people being wronged in such a drastic way it reflects them forever. As a human, how could reject our ability to have better lives? They must love inflicting pain on people and watching. Is this how they go home and raise their own children? I could not image. Should I become hollow and raise my children the same way? Seriously, will they ever make it when I’m gone if I don’t?

  17. So, if this passes then what? We can’t sue individually? What if you didn’t file with the AG? What happens to the ones who are in court with counterclaims and defenses to the foreclosure?

  18. cubed2k the will take only CHASE member.

  19. I know nothing and if I think I know something I know nothing. I do not give legal advice because I don’t know legal things.

    In negotiations with the banks, I truly doubt within my heart that the 50 state attorney generals have millions of complaints from everyone who we fraudulently foreclosed on.

    I truly believe, that this number is to satisfy the number of people who have a complaint on file, as there is true and real value behind that fraud that took place, and to pay fees for their costs to investigate, with a little over for those who have a ‘window’ to file a complaint after the settlement and get ‘something’.

    That’s all my opinion, but I don’t believe the investigation has the real number of victims in the fraud and that’s the most they can come up with for the various states.

    People want to get active, but I bet many have not even placed their complaint in the bucket, and it’s been almost 6 months since we’ve been put on notice that an investigation is underway.

    I know they called the OCC, and justice department and Fannie Mae, and the SEC, and all, but how many actually have a complaint that can be quantified by their state’s attorney general as to the amount of monetary damage they suffered plus compensatory damages.

    It may be too late to have their loss quantified since we’ve known for almost a month that negotiations are underway.

    I’ve said before, the problem was ‘us’ as well as ‘them’, but we are all in this together and we have to find a peaceful way to resolve this, but we must stop blaming others exclusively when we play a role in this too.

    I kept saying, I must have signed a bad contract for someone I never did business with to come in and take my home and make me leave and declare it abandoned and now that I got two 1099s from Fannie Mae and PNC Mortgage, both claiming to be the creditor.

    This is truly the Land of Oz, or Wonderland. I took the red pill.

    Light and Love,
    Trespass Unwanted, alive, allodial, corporeal, life, free, live born, born alive, in jure divino, in jure proprio, whole blood, freeman, adult

  20. The attorney generals need to be recalled by their consitutuents. This is not going to be a fair, just and equitable plan and the banks know that $20 billion is cents on the dollar for the trillions they have created in losses to this economy.

    They factored it into the potential losses before they even started down their path of destruction. They knew what they were doing.

    The homeowners if this is not acceptable had best step up now and sooner rather than later – as they said, there was no seat at the table for homeowners. You are not going to get a free home from the banks. It just is not going to happen.

  21. IS this is a big deal?

    I sent a QWR to my loan servicer asking for the claimed holder in due course of my loan, they have ignored this request for over a year.

    Finally the Loan Servicer sends a QWR response that says ” there is NOT ONE investor for you loan, there are mulitple investors and here is the entity that manages your loan pool; US Bank blah blah blah.”

    IS THAT A BIG DEAL ADMISSION? from reading this blog…is that not an admission that NO ONE owns my note or loan?

  22. Louise, I hire you for President!!!!!!!!!

    Well said. New slogan – BANKS YOU WALK AWAY.

  23. I’m not surprised. I knew this was coming and I knew Tom Miller had sold out and he and his fellow AGs would throw the homeowners under the bus.

    On another note, here is an excellent article about our broken financial system.


  24. Nothing but pennies compared to the $ 40 trillion
    that was stolen.

  25. Considering that the servicres have no skin in the game and that the loans have already been paid, this is all BS. The best way to do this would be to give the house to the homeowners and tell the banks to walk away. The economy would get better very fast. Burmese8@yahoo.com

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