Blue Mass Group

Reality-based commentary on politics.

Did you hear the banks got a trillion dollar bailout today?

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As some may be aware, the federal government has been working with state attorney generals across the country in order to “hold the banks accountable” for past misdeeds. Here’s background on the process and the settlement that’s been released.

The investigations have centered around the practice of “robosigning,” a method the banks have used to quickly get signatures slapped onto mortgage statements so they could go foreclose on homes, or as the victims of these practices may like to call it… fraud.

Robo-signing is a term used by consumer advocates to describe the robotic process of the mass production of false and forged execution of mortgage assignments, satisfactions, affidavits and other legal documents related to mortgage foreclosures and legal matters being created by persons without knowledge of the facts being attested to. It also includes accusations of notary fraud wherein the notaries pre and/or post notarize the affidavits and signatures of so-called robo-signers.

This has lead to thousands — if not tens or hundreds of thousands — of homes to be foreclosed on without the right and legal documentations (and by right and legal, I include “not forged.”). It’s such a rushed and sloppy method that homes have been foreclosed on without documentations at all, and in some cases without even being in default of the mortgage or the bank owning the rights to the home. The problem is so bad and pervasive that upwards of 5,000 members of the military have been illegally foreclosed on.

The scope and problem is so massive that it’s looking like the vast majority of mortgages that have been taken up over the past couple decades simply don’t have the documentations at all, hence the robosigning. The mortgages have been sold back and forth between banks so frequently, that it isn’t at all clear, in many cases, who owns the mortgages.

That means we’re talking about a problem that’s on the scale of trillions of dollars, potentially affecting millions of people.

While thousands of families have suffered from the abuse of this practice, and there’s thousands more who likely will, the government is about to settle with the banks — and give them future immunity — all for the price of giving these families $1800-$2000, the cost of two month’s rent.

From the first link (emphasis mine):

And then there’s the settlement price: $25 billion, divided up several ways. $3 billion will go toward refinancing for current borrowers who are underwater on their loans, as well as short sales. $5 billion will go as a hard cash penalty to the states, which can use them for legal aid services, foreclosure mitigation programs, and ongoing fraud investigations in other areas (one official close to the talks feared that much of that hard cash payout will go in some Republican states toward filling their budget holes). The federal government will get a cash penalty as well. Out of that $5 billion, up to 750,000 borrowers wrongfully foreclosed upon will get a $1,800-$2,000 check if they sign up for it, the equivalent of saying to them “sorry we stole your home, here’s two months rent.”

That’s what the people of this country get as restitution for the banks coming in and stealing their homes — $2000 bucks, if they’re lucky. Imagine what would happen if someone went into a bank and stole $2000, never mind the cost of a home. Their lives would be ruined and they’d be going to jail for years, if not decades.

What’s the worst part of this “deal?” though? The immunity. Generally, when you give a company immunity for certain kinds of crimes they’ve been committing, you want to ensure they’re not committing those crimes anymore. That’s not the case with banks.

They’ve destroyed the old-fashioned system of carefully keeping track of who owned what and don’t have any way of bringing that back from the dead. Banks are continuing to robosign, and will continue to do so in the future, and now we’re giving them the backdoor legal means of doing so without any risk. We’re legalizing mass fraud and not a single vote has been taken.

In the end, this is going to be a far larger bailout than anything the federal government ever enacted through legislation — and it’s a complete sellout of not just the American people, but the idea of the rule of law. We’re making the banks kings, leaving the rest of us, who own homes or who’d like to in the future, no better than serfs in their domain.

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Comments

  1. Sorry, I know I should be focused on the content of your post, but shouldn’t it be attorneys general, not attorney generals, like surgeons general and mothers-in-law?

  3. I give you, with no more ado, ¡the Witch Doctor of Democracy himself!

    On the foreclosure front, big news here. Eric Holder and attorneys general from 42 states have shaken down the country’s mortgage lenders for $25 billion. Folks, this whole notion of these predatory lenders and people being tricked into taking out a mortgage, have you ever heard of that happening? People wandering innocently by a bank on the street and some guy inside the bank with a hook grabs ’em in, “Okay, pal, you’re taking out a mortgage.” That’s what the regime wants us to believe happened with this.

    So as part of a campaign effort here, reelection effort, $25 billion from the country’s mortgage lenders to give to customers who were hit upon and forced, under duress, to take out a mortgage… (interruption) What was that? Can you get a piece? Perhaps. I think everybody’s share comes out to as much as $20,000. You might get paid off as much as $20,000 here if I’m reading it right. Now, what this is, folks, is social justice at work, because after all, the banks were forced by the government at the point of a gun to loan to people they knew couldn’t afford the mortgages. That’s what really happened. That’s the root of the subprime mortgage crisis. It was the government forcing the banks to lend money to people that never had a chance, would never be able to repay the loans. Social justice, affordable housing, the so-called good intentions and “Don’t judge us on the failure of our results.”

    So now the banks have the pay the price for making those bad loans. This is all part of continuing the ruse that the banks were the originators of this scandal and the originators of the problem. And so now there’s a $25 billion shakedown. I’m gonna tell … all of you mortgage people — you are not gonna see a dime. This is nothing but a slush fund. What Obama has done was gone to the bank, ’cause they’re having trouble fundraising. They’re nowhere near their billion dollars they’ve been bragging about. You ought to see what they’re gonna do at their convention. They’re gonna charge, what is it, a million dollars for a skybox. A million-dollar donation or something like that, to witness Obama’s acceptance speech. I think there’s a million-dollar charge or donation for something.

    But clearly, the Democrat national convention closing night for Obama’s acceptance will be accessible primarily only to the 1%. They’re gonna be the only people with the money to get in there, at least in a highfalutin way. So back to this foreclosure business. The banks were forced by the government at the point of a gun — Janet Reno threatening them with investigations if they didn’t participate in the program. They had to lend money to people that could not afford mortgages. So now the banks have to pay the price for making these bad loans. See, the banks, these evil, rotten bankers who tricked people into taking out a mortgage. I still want you to visualize that. I want you to visualize how, in your own life, how you could be tricked into taking out a mortgage. But the ruse must continue. So the banks have to now pay again. They’ve got to pay $25 billion.

    I’m told that somebody in the regime was actually fighting for $300 billion for the banks and they said, “Nah, that’s too much. That’s a big overreach. We’re gonna have problems. We’ll settle for $25 billion. Nobody will have a problem with that.” Now the banks are gonna have to give $25 billion ostensibly, now, to the people who shoulda never gotten these loans in the first place. People are underwater, who were foreclosed on. Textbook case of social justice. You hear the term, this is exactly how it manifests itself. (interruption) He does have a stash. Once again, what you have here is the force of government threatening the banks. The attorney general, Eric Holder, and the attorneys general, the 42 states, i.e., the government calling on the banks, “Hey, guess what we need from you, gang? We need a grand aggregate here of $25 billion.” “What if we don’t pay?” “You don’t want to know if you don’t pay.” It’s a shakedown.

    Now, this is Obama servicing his constituents. (&c. &c.)

    That’s rather a lot of Whight Guard stuff in one lump, no doubt, but Paddy McTammany thinks rather earnestly that the nobility and gentry who dwell above the clouds on the Great Blue Hill, in the shadow of the Palace of Public Television,

    could do with more roughage in their political diet.

    It will be interesting to see whether Senator Fratboy chooses to defend his occupation of The People’s Seat™ with that Limblovian jazz or plays “me too” with St. Elizabeth of H*rv*rdy.

    Happy days.

  5. Globe

    In December, Coakley — frustrated with the slow pace of the national negotiations involving other state attorneys general — sued the five major banks for allegedly illegally taking back properties, filing fraudulent foreclosure documents, and failing to assist borrowers who could have stayed in their homes if they had been allowed to make lower monthly mortgage payments.

    She also sued the private Virginia-based lender-created company Mortgage Electronic Registration Systems Inc., or MERS, claiming it was set up to let lenders to avoid state requirements that they record mortgage transfers. She also said the system conceals the true identity of mortgage holders.

    Under terms of the agreement, Coakley apparently will still be able to pursue claims against MERS and allegations that banks completed foreclosures here without having the proper paperwork.

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