I'm pissed, and so should you.
This is proof positive we no longer live in a state of fairness when it comes to the financial/government complex that has formed.
So how much does it cost to defraud thousands and thousands of people out of money through sub prime lending generating billions in revenue, millions in bonuses, and more importantly a financial crisis that saw trillions disappear into thin air, an economic collapse and loss of jobs world-wide, the triggering of massive taxpayer funded bailouts in the billions of those same companies that perpetrated the fraud? Not to mention the world economy constantly being at the edge of the cliff without massive NEW inflationary money which steals your purchasing power?
$25 Billion...
Does anybody care? Nope...Giants won the Super Bowl. New York, the epicenter of this fraud is happy, so the rest of the world should be to.
Read it, understand it...
http://www.zerohedge.com/news/us-settle-fraudclosure-25-billion-even-it-channels-fake-tough-guy-meaningless-lawsuit-against-v
For those with WSJ subscriptions...
http://online.wsj.com/article/SB10001424052970203315804577211620066795962.html?mod=WSJ_hp_LEFTTopStories
http://online.wsj.com/article/SB10001424052970203315804577211470167644182.html?mod=WSJ_hp_LEFTTopStories
So in case you want a quick summary...
Banks, Lenders, Fannie Mae, Freddie Mac take cheap interest rates and gov't subsidies to loan unqualified people massive amounts of money to purchase inflated priced homes through sometimes (but not always) shady practices (i.e. teaser rate loans, interest only loans, no money down loans, etc.).
These same lenders then take all of their loans (that they made nice income on at $2k+ for each loan/refinance) and pool them together to sell them immediately as securities. Buyers then use similar banks/investment houses as mediums to sell these pooled securities to investors (with broker fees). The securities that they can't sell, are packaged into new securities with new names (all AAA rated...equal to Gov't Bonds). Extra securities/hedges are also created to fuel even more loans and re-insurance of loans to fuel even lower interest rates and more income on the same loans.
Meanwhile...the original loan is actually sold to each place/pool of security, and in some instances, an extra loan is created out of thin air to mimic the original loan through derivatives. Since there is little tracking and no paperwork really done to officially transfer the loan along the way (and definitely not when a new one is created through derivatives), there is really no way for a bank or whoever to officially foreclose on the mortgage and take the house when the unqualified lenders stop paying because the paperwork was never done.
Here enters the robo-signing, where outsourced companies were paid to do the paperwork, but in actuality just paid people to fraudulently sign for the lenders/banks, etc.
http://www.cbsnews.com/stories/2011/04/01/60minutes/main20049646.shtml
This allows the banks/lenders to foreclose on homes, take people out of their houses and sell them to re-coup the money lost through the loan (if possible) without having the legal documents to support it.
Home owners can allow it to continue, or fight it and go to court. If they sue and go to court who knows, but my guess is they could get a lot more personally. Most states Attorney General's are filling claims against the lenders already in class action lawsuits, but they will settle as well.
What are they settling for again...$25 Billion. And not all of it goes to the people it harmed the most.
"The planned pact would involve around $5 billion in cash penalties, payable to borrowers, states and the federal government. That includes $1.5 billion in cash payments to borrowers who went through foreclosure between September 2008 and December 2011. Borrowers could receive $1,500 to $2,000 each, with the actual amount paid depending on the number of borrowers filing a claim.
The agreement is expected to call on the banks to provide $20 billion in other aid—by cutting loan balances for tens of thousands of homeowners and by refinancing thousands of borrowers who are current on their loans but owe more than their homes are worth.
Officials say the deal will help provide immediate benefits to around one million homeowners, while raising accountability for banks that work with borrowers facing foreclosure. The foreclosure process has been snarled since late 2010, after allegations that banks had serially submitted bogus mortgage documents when attempting to repossess homes from delinquent borrowers."
As the Zero Hedge article points out...why now?
"The bank payments would unlock a large new source of housing funding at a time when Congress doesn't appear likely to approve new spending measures to tackle lingering problems facing housing markets, such as a refinance program that President Obama unveiled last week."
That means...they need housing prices to rise to make the economy "look" good. Not that it actually is mind you.
Forget that people shouldn't have borrowed more than their income level. This fraud has nothing to do with that. This has to do with money, fraud and just lawsuits getting swept clean for pennies on the dollar to the same banks and lenders that perpetrated the fraud in order to boost their stock prices, and make the economy look nice and rosy. Who gets screwed? We do...again.
Other articles of interest and info.
