What's the support behind the number of "wrongly foreclosed upon borrowers" being 750,000?

Flaming pile of shit doesn't even do it justice. That's an insult to flaming piles of shit everywhere.

Seems worth noting this little bit of info

Yay! We can have a class action suit then where the Banks pony up $50B more and the lawyers split $49B of that. But, good news! Everyone who opens an account with one of the Banks will get $100 deposited! WHAT A DEAL!

BTW, this is "govern at the state level" at work, kiddos- it sucks there just like at the federal level. This is Dems and Reps across the country agreeing. Wait- that last sentence sounded too much like panerd.

SI

It's almost certainly far higher if you just look at the law. Millions of homes were foreclosed upon without following state laws on custody of documents and filing requirements. Now many of those homes would have been legally foreclosed if the banks had followed the law, but they shouldn't have the option to only follow the laws when it's profitable.

Nah. My girlfriend and I make a good living between the two of us (about 100k) and live in a modest 120K house. Nobody "tircked" us into keeping up with Joneses and living in a 500K house at a too low to believe interest rate. I realize that this isn't the case for everyone and some people actually believe everything they are told and some people ended up way upside down but I guess my standard answer applies here also... if somebody can explain how the government is actually going to fix this with no corruption/no kickbacks I would love to hear the story. But my guess is this will be yet another example of big federal/big state government/big business screwing over the American taxpayer yet again. :)

Umm ... I don't see anything limiting anyone to a class action suit.

It's not really a $25b settlement. They are only paying $5b in cash, the rest is just in "aid" which includes refinancing.

All sides feel they should have gotten more...sign of a good settlement. ;)

Key to any bank pain here is where the "soft dollars" come from. The deal intends to incentivize banks to modify and/or give principal reductions on mortgages they hold on their balance sheets rather than mortgages held by investors in mortgage backed securities. We'll see how that plays out.

There are two sides to the flat earth argument but that doesn't mean we'll meet in the middle and agree to disagree. Reality isn't a big game of IWS or Crossfire- we know it's not flat so there aren't really two legitimate sides.

If you see any bank rep, they know they really got over on this one but will say how tough it is just to give a perceived other side. Just look at BofA's stock today to see all you need to know from what the market thinks: they pay the highest share ($12B) and the stock actually gained today.

SI

My wife and I are in a similar boat financially tho we've been renting so that we could *gasp* save up more than 20% for a down payment. We've been at that spot now for a couple of years and will probably buy in the next year. We can all be different ideologically and still reach the same conclusion for different reasons, even with filthy Tigers :)

That said- I don't see how this is about the "government" fixing things. From what I understand, this settlement is to waive some criminal penalties. It's basically that, as a company, you can pay $5B to get out of jail (and $20B in funny money). I see this as a two piece process, not one fail swoop. First, you try to maximize the penalty and then you try to use the money for the most good. But there's no way this was going to solve everything. The travesty of it is that houses are $700B underwater and the banks write off $20B of it. Does that even qualify for a drop in the bucket?

SI

The government should go after whoever breaks the law and get as much money as they can out of it. (and in this case, not being so fast to settle and actually pursuing this with litigation for years would have acted as a pretty huge stimulus package on its own).

But I wonder, if the banks followed the laws, where would be today? If they were, well, foreclosed from the foreclosure options because of their own screw-ups, then we'd just have to give them more taxpayer money to bail them out, right? And if millions could just live in their homes, with no foreclosure threat, there's no real reason to pay anything, which impacts the banks more, which impacts the bailouts. I suppose the banks could have just sued the people that weren't living up to the loan agreements, and tried to seize the house just as any other asset. (assuming that the loan agreements weren't illegal too). I'm just imagining a world where the banks were still incompetent, but didn't break laws. Things might have been a lot worse. Maybe the banks figured that the government knew this, and there were already behind the scenes understandings before the banks even broke laws, that they wouldn't be hammered TOO hard.

I wonder about this and a few other things as well.

Such as who are these unlawfully foreclosed people? Were they paying their mortgage and all of a sudden their property was seized? Or were they simply hanging out in the house for many months & the inept banks finally realized this & went immediately to foreclosure on them without due process?

I'm fine with prosecuting unlawful practices without settlement personally. But the thought that we need to give a check to people who were living rent/mortgage free for some period of time seems to be...I dont know...the least of our problems in all of this and the thing that can wait. Right now, we have millions of underwater (but current) mortgages and I'd like to see more focus & funds diverted to help those people, personally. After all, they are the reason the most heavily impacted markets didn't become wastelands (or more than they did).

I'm not opposed to a settlement as I don't think the system could handle the outcome of criminal trials for all these cases. This settlement, though, is way too easy on the banks and bankers. The amount should be ten to twenty times higher and some senior management should step down. Yeah they didn't sign or handle the documents, but I'm beyond tired of the John Galts of the banking world claiming they aren't responsible for anything except those things which make their salary indispensable.

I asked the question to get at your last sentence. We can debate what "wrongfully foreclosed upon" means but to the vast majority out there, they read that and see the husband and wife, parents of two, who are making ends meet, paying their bills, and all of a sudden, their house is taken away much to their surprise. It simply didn't happen like that except in a miniscule number of cases. You're right that they should be held accountable for the shortcuts taken. But the ironic part of this is that the sheer volume of pending (legitimate) foreclosures led to many people living in their homes for 6-18 months longer than they would have in a more stable market, when the foreclosure likely would have been done by the book, instead of in the manner which led to this whole mess.

For the record, I work down the hall from some of the guys who did the review, cited the violations, and wrote the Cease and Desist letter at one of the five banks.

I don't think you need to prosecute every case. Just a sample size would do fine to set the example that illegal enforcement is not acceptable even if you may have been justified in a common sense way. That's vigilantism and we don't accept it in other forms.

The key would be to get part of that sample size to include management that pushed the illegal foreclosure policy(s) within until you get to the highest level that wont talk.

Fuckwads.

Here's the article for reference.
Walker, Van Hollen: Chunk of mortgage settlement going to state budget - JSOnline

Not a surprise. There was widespread speculation that this would occur, particularly in some of the "red" states (although to be fair I'm sure it would occur in every state).

Just another reason this deal is worse than a shit sandwich.

More political drama by our resident partisans...blah, blah, blah...

Goooooo Team!!! :)

Ironically, Walker and Republicans heavily criticized Jim Doyle for using tobacco settlement money to help balance the budget.

Walker is a douche bag and the Dems could probably use this to their advantage in the recall this year. But if the Dems don't come up with something better than Kathleen Falk, Walker cruises and the recall was a big waste.

Shouldn't you be monitoring AP for liberal bias?

Only when banks and governments do business can you have a civil settlement of potential criminal cases. I haven't read the details on this, but I guess that's really what this was? It would be completely unethical for a prosecutor to do the same thing - specifically, by the rules of professional conduct.

Of course, if this was like a regular criminal case, the federal government would have to conflict it out, because they have a conflict of interest here. If a county prosecutor was so tied in with a local bank they were investigating for potential criminal charges, they'd have to conflict the case out to another county, or even a private attorney, to handle. When the feds "negotiate" with the banks, the client (us), isn't really being represented by anyone. One of the little dangers of centralized power.

Not as big of a douche bag as John Kasich who used his state of the state address to make fun of people with Parkinson's, talk about his hot wife, tell people winning awards not to sell them on ebay or the state would find them, and other weird, wacky stuff.

I haven't bothered the FOFC with that since October of 2010. Lets see your dumbass go that long without posting your unimaginative faux-anger political bitch-drama. ;)

Wow- just read about his speech. That's crazy.

The big takeaway here is "don't improv your State of the State address"

SI

I'm not really sure how this hasn't been bigger news to be honest. Watching parts of it, you almost have to believe he was drunk.

Complaining about partisan ship in a largely political thread is silly. It's just a way for some people to see themselves as above others. Of course you're a partisan tool, but I'm completely independent and above anything you'd do!

See how it works?

October 2010, bitch. :)

Rare bit of economic good news for the Athens, GA area this morning, as the Governor's office (and every politician who could figure out a way to take credit) formally announced plans for a major manufacturing facility that means 800 jobs by next year. The fuzzy math numbers claim anything from 1,400 to 4,200 jobs by 2020 but it's the 800 sooner than later that seem most important afaic (precious little industrial jobs here over the past decade or three)

Welcome to town Caterpillar.

Illinois was in the running too for it. The jobs are supposedly going to be coming from Japan which is nice that it isn't just moving from one area to the next in this country.

FWIW, I've been noticing a lot more "help wanted" signs for lower-level full and part time work. Store clerk positions and the like. That's a good sign inasmuch as I really had not seen those around for a few years.

That said, my one friend right now who is looking for a job above entry-clerk level is still finding the market super tight.

So things are better than they were, but far from where they need to be. Which is probably what 8% unemployment that used to be 10% unemployment is supposed to feel like.

This stuff drives me crazy. I'm all for helping people out, but the practice of helping out people who aren't making payments while giving nothing to those who have never missed a payment but struggle to make their monthly payments is unbelievable. I get that some people have issues due to loss of jobs, but there are a big chunk of these people that simply have decided to stop paying to avoid taking a loss. I get that, but don't then reward those people by erasing their debt while doing nothing for the people who prioritized their finances and made sure to keep paying their debts despite the sacrifices that it took to do so.

Bank of America Offers Principal Reductions to 200,000 Homeowners - Yahoo! Finance

200,000 is peanuts compared to the problem anyway. I've always favored allowing a judge to lower mortgage debts through bankruptcy proceedings, but our overlords aren't about to let that happen. That would allow the banks to keep getting some payment, keep homeowners in homes and keep neighborhoods from deteriorating with the municipality left to pay for cleanup.

I know a ton of people that couldn't afford to pay their mortgage because they were pissing their money away left and right ... new cars, expensive vacation trips, fancy things ... and some haven't paid mortgage in months. My mortgage payments have been on time since I was 21. I budgeted and saved knowing the economy is cyclical. I know less than a handful of people who couldn't make their mortgage because they were put out of work, it was people who were dumb with their money.

Wish I would have known I was going to be helped out, cause I would have blown $5k/mo in Vegas on hookers and blow.

Yeah, basically ignoring my mortgage payments in November and December and buying presents for family for Christmas instead could have netted me a six figure windfall. Obviously, I'm not doing something right.

I don't have a problem with a private creditor basically settling a debt with a private debtor, that happens all the time, its the "white house pressure" and "deal with state attorneys general and the U.S. Department of Justice" that makes this suspect. Once public government policy is involved, I'd say its fairer to give the breaks to people who have lost their jobs through no fault of their own (people roughly identifiable by receipt of unemployment benefits), than to people who "couldn't afford" the old payments but "can afford" the reduced payments (which really means they could afford either payment if they actually changed their financial priorities.)

Yep...this shit especially pisses me off


Why the hell do you HAVE to be late or in some way demonstrate you can't afford the property right now? This is fundamentally ass backwards.

I was just talking with my best friend for 20+ years, who now owns a title company. We were discussing the latest government programs out there & how f'd up they all are in terms of moral hazard.

Essentially, somebody like me...

• A guy who bought with 20% down, conventional loan, primary residence, mortgage well within my budget
• Lost his job (or more accurately, the company was about to go bankrupt so I had to find a new job)
• Got a job which required me to relocate out of state (otherwise I'm taking an easy 50% pay cut if I could even find somebody willing to hire me at 50% of what I made previously)
• Selling my house wasn't possible as my value dropped more than 50% in 2 years & I did not have the cash to unload it (and didnt want to short sale)
• So I rent my house & become a landlord for the past 3 years...all the while responsibly paying the mortgage on time despite occasional rental occupancy gaps
• Now I'm about to relocate back (same company) and resume primary residence at the house again

And I'm not eligible for a government refi- or principal reduction (government or otherwise) because

1. My loan was not FHA (which is 99% of the time a low or no downpayment loan...meaning somebody is stretching a little in the first place imho. Obviously just a generalization but my point is about responsibility & moral hazard)
2. I'm never late

Now...I don't need or want government assistance to refi- my loan when I do get back to living in my old house as I will have the cash to make up the gap (or at least I think I will). But of course...this make me the idiot, sucker, etc.



I realize its much better to have the problem of having a job and being able to pay my mortgage, despite not living in the house, versus having no job & no way to pay for it....but thats called life planning imho. I knew I could float for almost a year with my expenses (mortgage included). Had it not worked out that way, and I was not able to find a job inside of a year, then yes I'd have been SOL. Nobody likes that situation but I'm not sure why anybody would owe me a refi- or principal reduction had I found a job for 1/10th of what I made.


I've been saying it for years now...what the government has been doing is creating an atmosphere of not just moral hazard...moral anarchy imo. You cannot save everybody (I give "me" as an example there) but even worse, you do NOT want to create an atmosphere that rewards reckless behavior. And putting 3.5% (or nothing) down, spending your actual income on car payments for a BMW, big screen TVs, taking a cruise for 5 days, and then missing the mortgage payment and getting a principal reduction does not sit well with responsible people (including responsible people that truly have lost their income).


IDK...maybe I'm doing it wrong too.

Another good plan would have been to clear out management when we gave them the bailout and then prosecute all the people responsible for robosigning.

But this plan allows them to pretend they're helping while they fire up the outrage machine against the government. The shitty terms aren't a bug, they're the main feature.

Yep...you got it.

That said, there is plenty to be outraged about regarding the government. Like the initial terms of the bailouts, the lack of prosecution after the bailouts, and the half-assed programs intended to help homeowners.

What the government really should have done imho, as the housing market was tanking in 08/09/10, was to provide a level of credit to the seller of a primary residence. This could have been a % of the sale price, or some % based on the average valuation drop in a given market (or even more granular such as the zip code), etc. They could have made this "credit" a shared 50/50 cost with banks to ensure all sides are properly incentivized to sustain reasonable sales prices.

This would have allowed people who "need" to sell their home, but had bought responsibly, the ability to do so. The reasons people may "need" to sell their home could be many...loss of job, need to relocate from a market that was artificially inflated, realization that they bought more home than they could afford longer term, etc. In the end it doesn't really matter "why", just confirm that the seller was in fact the owner/occupant of a primary residence for some period of time (i.e. they can't be an investor, claim occupancy for a week, then sell). This would have helped to clear out the people who realistically can't sustain themselves in their current home without rewarding investors that tried to flip houses & lost on that bet.

Instead, they chose to screw around & play politics for 2+ years and finally pass some bills that really don't help people who have tried to be responsible in light of a massive change in market dynamics that (to be clear) were not seen by "experts" either. You wouldn't have stopped price declines (nor should that have been the point of it) but you would have slowed the declines dramatically by not putting as many distressed properties on the market to further devalue the remaining market for years.

You'd also have enabled the "commoners" to have escaped unsustainable debt levels and they could have been contributing to the economy much more quickly (as opposed to trying to sustain the unsustainable mortgage payment or simply NOT paying it...which sounds like it keeps money in the market rather than a bank but in reality it simply diverts it from a viable business that would have collected rent). This also would have helped to mitigate the stigma or burden of owning a home for future would-be home-buyers.

Sorry...another long ranting post on this subject. But I just can't believe we (collectively) cannot solve these types of problems without rewarding bad behavior and punishing those who try to act responsibly. And to be clear...you are punishing responsible people when you reward bad people. You're just doing it collectively by class, rather than incrementally by person.

Bad jobs report. Unemployment up and market has taken a dive.

Saw Krugman on a show the other day and thought he summed it up best. Time we start admitting to what this is, a depression.

I am not even close to understanding the economy and hot it works but I've wondered about the following...

What if every homeowner was allowed to refinance at this moment in time down to 3% interest?

The 10-year is down to 1.4%. Lowest in history. Where are all the deficit hawks now? We should be doing every infrastructure project we can think of right now.

The corporations are in control; they're very happy with things at present - they're making good profits with lower costs ....

The fact that the public are hurting and unemployment is high isn't a concern t o them at all.

Governments SHOULD be investing heavily in infrastructure and helping society by creating jobs that way, but they're controlled by corporations and money men so don't want to potentially increase inflations which would devalue the profits the corporations are milking ...

Add to this the various laws/rules which are being forced through during this crisis to benefit money men and corporations and you can see why they're happy for this state of affairs to continue as long as possible.

(end cynical rant - its early morning and I haven't had my second coffee yet ;) )

I don't think corporations want a shit economy. There are a few that do well during this, but having all your customers be broke is not a good thing.

The problem is that they don't want their customers broke - but like banks they only think in terms of themselves and their profits.

For instance why should they hire if its not going to maximise their profits, better to automate and cut their work force (check out your local Walmart/DIY store and check how many self-service tills there are today etc.).

Each decision like this maximises their profits in the short-term while subtly increasing unemployment as a by-product.

This isn't particularly 'evil' imho, its just capitalism at work - however a by-product is that going forward there will be fewer and fewer jobs each decade, at some point society will have to adapt to take this into account and (hopefully) look for an alternative to capitalism which doesn't victimise people who can't find jobs when there aren't any available.

PS - If you look into the jobs figures you'll find two things (1) private sector not hiring very quickly (partially due to the above imho), (2) the continual 'cuts' which are on-going within the government are heavily weighing on things.

BUT BUT BUT, we need austerity. Cut taxes on the wealth builders the very wealthiest of american's so the crumbs roll down hill. That worked {didnt it}. Such horseshit. All the time.

We need/needed sensible cuts aligned with actually taxing corporations and billionaires rather than letting them get off scot free ...

That would have allowed the government to invest in infrastructure and create jobs - which in turn would have encouraged those corporations to expand and increase their profits generating more taxes .... turning a negative cycle into a positive one.

Not to argue, but, how is having 91-92% employment a depression? During the Great Depression, unemployment rose past 20%. I'd think a better description of what is going on is employment stagnation.

And people obviously had a much lower standard of living then, we've gotten pretty fat and happy and entitled to stuff and shiny new things.

But I think there is a looming employment crisis. As some point we'll have to get past the idea that everybody has to have a job. That doesn't mean the end of capitalism, because the smaller number of people who do work meaningful jobs could still be much better off, and then there would still be great competition for those jobs, but at some point there will have to be greater social support system for those without jobs. (that's the general direction anyway, you'd much rather be unemployed now than during the 30s.)