The $26 billion represents a significant settlement, but it clearly won't stagger the banks too much. Together, the four banks mentioned above took in a total profit of $47.6 billion in 2011. It's not as if the banks will be paying the settlements out of pure profits, either; they've all set aside a fair amount of capital to pay for their mistakes. Still it's telling that the banks will be paying just about half of their annual profits to walk away from the foreclosure mess. (2/9/2012 . Daniel Pereira. HERE)
[Picture by Pat Darnell]
Three questions come to mind:- What is the Legal thing to do?
- What is the Right thing to do?
- Who gains from the decision?
" ... Kentucky attorney Jack Conway gestures as he announces Kentucky's inclusion in the Joint State-Federal Mortgage Servicing Settlement Thursday, Feb. 9, 2012 at his office in Frankfort, Ky. Conway said $58.8 million of the nation-wide $25 billion would come to Kentucky. / (AP /John Flavell) ... " Kentucky’s share in the settlement amounts to $58.8 million, while Indiana’s is $145 million. ...""... The deal with 49 of the 50 states requires five of the largest banks to reduce loans for about 1 million households at risk of foreclosure. The lenders also will send checks of $2,000 to about 750,000 Americans who were improperly foreclosed upon. The banks will have three years to fulfill the terms of the deal. ( Feb. 9, 2012. HERE) ... "
" ... He [Conway, DA, KY] called it “a first step in holding banks accountable for the mortgage foreclosure crisis” and stressed that the settlement doesn’t limit states’ rights to pursue further civil or criminal actions against banks. It also does not limit homeowners’ ability to bring legal action against banks, he said. ... "The attorneys general set up a website — www.nationalforeclosuresettlement.com — and encouraged homeowners to wait to hear from their banks over the next nine months or to call the banks and ask about their eligibility. It will take about three years for the settlement agreement to be fulfilled.
Moopig's Conclusion
" ... The $26 billion settlement helps. But it's a long way from healing the grievous wounds left by the crisis and the fraud. ... "1. The banks committed fraud when they let their paperwork overwhelm them. In recent past, Banks started signing off on foreclosures that were illegal. How to make that legal? Every foreclosure must be reviewed. This is a nightmare for the property owners and mortgage companies and the litigation is mind boggling. [We would be better off if some of these lenders bellied up anyway.]
2. Cancel every foreclosure that was imposed from the era discussed, that seems the most righteous thing to do. Go back and declare moratoriums on all those trumped foreclosures. That would put a cost of $800 billion on the deal, more in line with the crimes committed.
3. State Governments will prosper from this lawsuit as millions pour into their coffers. And that is money for the local politicians. Confusion on who will receive the paltry $2k per damaged mortgagee, that is proposed, will make a few local yokels richer.
__________________Reference
http://www.courier-journal.com/article/20120209/BUSINESS/302090076/5-banks-settle-mortgage-deal-25-billion?odyssey=mod%7Cnewswell%7Ctext%7CHome%7Cs
http://www.nationalforeclosuresettlement.com/
http://community.nasdaq.com/News/2012-02/banks-settle-foreclosure-fraud-cases-for-26-billion-but-mers-lawsuit-continues.aspx?storyid=119771#ixzz1m5JUoKEA
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