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Forum Post: Foreclosure Settlement a Win? Not So Much

Posted 2 years ago on April 6, 2012, 2:58 p.m. EST by GirlFriday (17435)
This content is user submitted and not an official statement

The $26 billion national home foreclosure fraud settlement was a win for homeowners and justice, right?

Wrong, argues Scott Bailey, regional labor economist for the state Employment Security Department, in his latest “Southwest Washington Labor Market News” report.

Before breaking down Clark County’s job and unemployment figures for February, Bailey takes on the foreclosure settlement in a footnoted analysis under the “State of the Nation” portion of his report.

It’s lengthy but worth reading. Here it is in its entirety: http://www.loansafe.org/foreclosure-settlement-a-win-not-so-much

17 Comments

17 Comments


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[-] 2 points by TitusMoans (2451) from Boulder City, NV 2 years ago

Ah, yes, I live in Clark County, Nevada, which has one of the worst foreclosure rates in the country. The settlement means almost nothing; it only helps those people who still have their houses, while ignoring those who have lost theirs, or are so far underwater they will never recover their investment.

The settlement is little more than positive spin for the banks and polticians involved.

[-] 1 points by GirlFriday (17435) 2 years ago

It's a joke, that's for sure.

[-] -1 points by Centerrightcountry (16) 2 years ago

When did making money in real estate become a civil right?

Why do liberals support squatting? Those in default pay NOTHING pending the finalization of foreclosure. That means no interest, no principal, no real estate taxes and probably not even insurance. And many of these people didn't even make a damn down payment. The left is upset that the post-default free-rent period isn't longer; that's bizarre.

Truly, default isn't evidence that the bank is bad.

The settlement is little more than a political shake-down of banks opportunistically done over a paperwork issue.

[-] 2 points by TitusMoans (2451) from Boulder City, NV 2 years ago

You certainly have your version of events. Of course I've grown to expect that from the right wing: they revise history, current events, and I'm sure even the future, if they could, to fit their own twisted mentality, which I'm not sure qualifies as human.

[-] -1 points by Centerrightcountry (16) 2 years ago

Borrow money, default, and then default itself becomes evidence of the bank's badness and greed, not in the least evidence of the borrower's greed and irresponsibility. So, the bank's badness should be punished and the deadbeat "victim" hailed.

Grow the fuck up. Home equity appreciation isn't yet a welfare state entitlement program.

Squatter nation: the leftist dream.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Well, it's better than nothing at all !

[-] 2 points by GirlFriday (17435) 2 years ago

Looks more like an attempt to pacify.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

26 billion is a lot of money . I don't know how many foreclosures there were , but divide 26 billion by 1 million = 26 thousand $$ .

Now most of those foreclosures did not occur right off .. a lot of them paid a few years .. say $30 or $40 thousand to the bank mortgages .. paying down the debt , and than the bank gets the house.. with what was already paid on it .. and now another 26 billion $$ to divde up ..along with whatever bailouts already, looks like the treats keep coming !!

[-] 2 points by GirlFriday (17435) 2 years ago

HOW does this aid those who have already lost their homes?

It doesn't.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

I believe those whom lost their homes will get a few hundred$$ it's not much.. but like i said earlier, better than nothing "

If their had been a cap on profits , home prices would not have gone through the roof , and home owners would still be in their homes .. but no one wants to listen .. GF , what can we do !

[-] 2 points by GirlFriday (17435) 2 years ago

Don’t the banks have to pay a lot of money in fines–$26 billion that has to be used to help out homeowners by writing down their principal? No. First, the $26 billion figure came about because it was a crude estimate of the illegal fees that banks charged to homeowners. So there were actually no punitive damages—just a payback for what was stolen. That’s not all: “That $26 billion is actually $5 billion of bank money and the rest is your money. The mortgage principal writedowns are guaranteed to come almost entirely from securitized loans, which means from investors, which in turn means taxpayers via Fannie and Freddie, pension funds, insurers, and 401(k)s.”7 And to add insult to injury: according to Neil Barofsky, who was special inspector general tracking how TARP funds were spent, banks will be able to get credit from another government program, the HAMP program to help out homeowners, when they do make mortgage writedowns. Essentially, another government program will be paying for part of their “punishment” which actually isn’t a punishment.

“Is that all? No, it gets worse. Basic contract law states that in the process of writing down a mortgage, any second mortgage or home equity loan would get wiped out, and the banks holding that second mortgage/HELOC would have to eat the loss. In an unprecedented action, this settlement actually keeps those second mortgages whole, “so this deal is a stealth bailout that strengthens bank balance sheets at the expense of the broader public.”

“Well, at least the abuses have stopped, right? Nope. While settlement talks were in progress, the U.S. Housing and Urban Development (HUD) Inspector General analyzed the foreclosure processes used by the five banks under investigation, and found they were still using robo-signers. As one wag put it, it’s like “cut[ting] a deal with Al Capone while Capone is still on a shooting spree.” Even worse: ‘The mortgage settlement lets banks systematically overcharge you and wrongly take your home.’ The settlement defines a tolerance level for error in the foreclosure process. Banks can keep on making ‘errors’ (e.g. overcharging homeowners or foreclosing when there aren’t grounds) as long as the ‘errors’ fall within defined limits. ‘Most plainly, the bankers can tell 2.5 million people: ‘Hey, you didn’t make your payment this month, your check’s short and we’re putting it in the no man’s land of a ‘suspense account’ triggering delinquency and fees, even though you really did pay in full and have the canceled check to prove it. And guess what? No one but you cares; law enforcement won’t even consider dinging us for it.’

[-] 2 points by DKAtoday (28261) from Coon Rapids, MN 2 years ago

Tell it like it is - I love it when you serve up a helping of reality.

[-] 1 points by GirlFriday (17435) 2 years ago

Thanks, but that is the article....that I don't think he read.

[-] 2 points by DKAtoday (28261) from Coon Rapids, MN 2 years ago

You can only share freely, it is up to others whether they should learn, or not examine, or be human or not.

You provide educational material - {:-]) - You Rock.

[-] 1 points by GirlFriday (17435) 2 years ago

Thanks!

[-] 1 points by DKAtoday (28261) from Coon Rapids, MN 2 years ago

Again - Thank "YOU" and all who are like you.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Okay GF.. I am greatful for the info you have shared.

I personally would like to see those whom sold the homes at such outrageous greed mark-ups , be retroactively required to pay back the underwater amount of the home . In fact a new law should be passed ensuring home buyers underwater protection .. difficult to estimate for sure , but not impossible.

A cap on profits would fix it all GF. the banks would be capped , making loans more affordable, and homes would be capped making them more affordable too .. and the buyer/consumer would have a job because sales would be off the shelf with prices so low due to profit caps..

But it's nice to see you have an eye on the tricky banksters ..expose them all you like GF .. We all thank you

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