It looks like the banks have finally gotten a deal that will cost them $25 billion and let them off the hook for the robo-signing scandal. I’m no expert on these things but it doesn’t seem to be that important. The money the banks are coughing up isn’t enough to fix the housing slump. The immunity they received is incredibly narrow. I advise you to ignore people who are freaking out on either side of the argument. We’re still going to be in the same place we were. The housing market is messed up, with too many mortgages under water. The banks are still facing an aggressive investigation of their practices during the housing bubble. The deal may help on the margins. It’s unlikely to have many negative consequences. And most of the people who should be shamed, pauperized, or imprisoned will still get off scot-free.
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BooMan
Martin Longman a contributing editor at the Washington Monthly. He is also the founder of Booman Tribune and Progress Pond. He has a degree in philosophy from Western Michigan University.
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As long as they dismantle MERS. Stay tuned …
Commenter talktotennessee on FDL writes:
Schneiderman’s efforts to discredit MERS is key to topple the house of cards. It doesn’t matter who is or is not prosecuted. The only way to motivate banks is to remove MERS’ legal standing. On shaky ground now, if MERS is exposed, you will see the financial industry become a lot more cooperative in short refis and modifications. If confirmed to have legal standing a mountain of shadow inventory nationwide will be dumped on the market as REOS. The industry is busy right now short refinancing their stuff to clean up their fraud and bad documentation. Much is just sitting in the shadows waiting for bank amnesty/release.
If you think its bad now with 20-30% of value lost, just wait!
Housing sales are flat now in many areas. It isn’t settling folks, everyone is waiting for a double dip and it will be a big one! Housing is pivotal, you can’t sell underwater, you can’t get an appraisal,you can’t find a buyer who will buy arms length. It is a lot worse than most realize. I am talking high end non defaulting homeowners. Subprime junk is history. Too bad it will only be realized after another crash, just as it was in 2006-07. But then the banks will be off the hook won’t they?
http://my.firedoglake.com/members/talktotennessee/activity/800033
I wish I shared your optimism. However, aggressive investigation doesn’t mean anything will come of it. You still have to overcome complicated crimes, politically connected suspects, unlimited amounts of money, and the best teams of lawyers, working in shifts, that unlimited money can buy. The result, in the US justice system, is no slam dunk.
That blockquote reflects optimism?
My bad, I misread the sentence.
However, aggressive investigation doesn’t mean anything will come of it. You still have to overcome complicated crimes, politically connected suspects, unlimited amounts of money, and the best teams of lawyers, working in shifts, that unlimited money can buy.
Why prosecute any rich person accused of any crime then?
actually, they should be shot dead on sight.
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California and New York AG’s are still holding out of today’s proposal. AG Schneidermann sues banks over foreclosures – Feb. 3
"But I will not let myself be reduced to silence."The article says that, yes, New York and California are continuing with their pursuit of the banks, but no, they’re not holding out on this agreement — they’re signing on. The Obama administration negotiated this deal so that certain state prosecutions could still proceed.
In the agreement’s expected final form, the releases are mostly limited to the foreclosure process, like the eviction of homeowners after only a cursory examination of documents, a practice known as robo-signing.
The prosecutors and regulators still have the right to investigate other elements that contributed to the housing bubble, like the assembly of risky mortgages into securities that were sold to investors and later soured, as well as insurance and tax fraud.
Officials will also be able to pursue any allegations of criminal wrongdoing. In addition, a lawsuit Mr. Schneiderman filed Friday against MERS, an electronic mortgage registry responsible for much of the robo-signing that has marred the foreclosure process nationwide, and three banks, Bank of America, JPMorgan Chase and Wells Fargo, will also go forward.
Along with how broad the releases would be, California’s attorney general, Kamala Harris, also pushed for her state to be able to use the state’s False Claims Act. That would enable state officials and huge pension funds like Calpers to collect sizable monetary damages from the banks if officials could prove mortgages were improperly packaged into securities that later dropped in value.
The Obama administration negotiated this deal so that certain state prosecutions could still proceed.
are you people brain-dead around here? If the banks are prosecuted to the fullest extent of the law, they are dead, deader than fuck, the last thing Obama wants in a deflationary environment. “Certain state prosecutions” are purely political campaigning.
I thot you poli-freaks knew something about politics, but I am just less and less impressed every day. Some days, you impress, others, gah!
There really is something wrong with this country, in general, including a total lack of perception and reason.
I’m nobody, but you guys present yourselves as alternatives to Brooks and Friedman. Jiminy effing mother fucking crickets. It ain’t working.
I’m sorry. I apologize. Someone get driftglass on the horn, and we’ll harass him instead.
what does it matter when liberal dems as a block owe dick cheney an apology? (according to the WaPo; and prolly according to me, as well.)
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The Financial Times opens with the headline today: “US banks near $40bn housing deal for all 50 states”.
"But I will not let myself be reduced to silence."This whole issude is very complicated, and many of the most technically knowledgeable and vociferous reactions are coming from investors who are stuck with these mortgage securities and whose objectivity is thus questionable.
I think the real key is Schneiderman’s civil fraud suit, filed last Friday, February 2, in NY State Supreme Court, against MERS (actually, against BoA, J.P. Morgan Chase, and Wells Fargo for their use of MERS). My interpretation is that the combined AG thing has served its purpose and is about to be superseded. Basically, the AG settlement involves actions that are clearly fraudulent, but were instrumental rather than lying at the heart of the problem. In other words, robo-signing, etc., is a prosecutable crime, but it is only an accessory to the comprehensive criminal enterprise built on MERS. In fact, robo-signing, etc., is still an issue under the MERS suit, but it is not the main issue. So I think the AG’s succeeded sufficient pressure on the banks to get them to settle this, but if they had gone ahead with a suit, it would have not gone to the heart of the matter. Very telling is the fact that the banks were demanding Schneiderman drop the suit:
“Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. made a last-minute demand that New York drop claims filed against them Feb. 3 as a condition of the settlement, a person familiar with that case said. The push by the three banks raised an obstacle in getting Schneiderman’s support for the deal, said the person.
“New York sued Bank of America, JPMorgan and Wells Fargo in state court in Brooklyn, saying their use of a mortgage database known as MERS led to improper foreclosures. . .
“Dani Lever, a spokeswoman for Schneiderman, declined to comment on the demand by the banks over the MERS lawsuit. Schneiderman, who was scheduled to make remarks on the settlement talks yesterday, postponed the conference call indefinitely, according to a statement.”
http://sfgate.bloomberg.com/SFChronicle/Story?docId=1376-LZ1A1Y1A1I4H01-6U27CEGRLA3L231VD8NJ9M5P3V
Schneiderman’s going to drop the suit? I don’t think so …
http://www.ag.ny.gov/media_center/2012/feb/feb03a_12.htm
The fact that Obama just named Schneiderman to head a special federal mortgage probe has been seen by the usual Obama-haters and -doubters as a cooptation of the NY AG, and thus all the AGs who have been allied with him. Boy, that Obama is pretty smart for a guy that can’t say a sentence without a teleprompter, to outmaneuver I don’t know how many state AG’s. On the contrary, I think the investigation will provide needed resources for Schneiderman’s own suit and the many others that are pending or to be filed in whatever states of the union.
http://www.ag.ny.gov/media_center/2012/feb/feb03a_12.html
http://newsandinsight.thomsonreuters.com/Legal/News/ViewNews.aspx?id=38690&terms=%40ReutersTopic
Codes+CONTAINS+%27ANV%27
Schneiderman was on Up with Chris Hayes about 10 days ago, and he explained very well that his new federal role does not limit his role as NY AG, and he is proceeding with lawsuits, etc.
Sorry, there was a slight mistake in my link (above0 to the NY AG page on the MERS suit.
http://www.ag.ny.gov/media_center/2012/feb/feb03a_12.html
Robert Kuttner has just, and I mean just, posed this story at American Prospect, and ther is no indication that Schneiderman is relenting, quite the contrary.
“In the final deal, whose actual text has not been made public, Schneiderman appears to have won big. According to press releases both by the Obama administration and by Schneiderman, banks get immunity from further legal action only narrowly related to the robosigning mess.
“Thanks to pressure from Schneiderman and four other progressive AGs, it’s still open season for all other civil and criminal and civil liability related to fraudulent activities by banks and their confederates in the creation, packaging and marketing of mortgage-backed securities whose abuse was at the heart of the financial collapse.”
It’s a great article.
http://prospect.org/article/mortgage-deal-devil