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Proper end to a great week.

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Alexander Snyder-Mackler
On Oct 29, 2011 9:45 PM, "B" <261penn@gmail.com> wrote:

> See link below
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>
>
> Begin forwarded message:
>
> *From:* Joe Rogalsky <joerogalsky@gmail.com>
> *Date:* October 29, 2011 7:38:08 PM EDT
> *To:* Beau Biden <261penn@gmail.com>
> *Subject:* *A Foreclosure Settlement That Wouldn’t Sting - NYTimes.com*
>
>
> http://www.nytimes.com/2011/10/30/business/a-foreclosure-settlement-that-wouldnt-sting.html?ref=business
>
> A Deal That Wouldn’t Sting
>
> AFTER months of back and forth, a deal that is supposed to punish large
> financial institutions for foreclosure misconduct may be nigh.
>
> While the exact terms remain under wraps, some aspects of this agreement —
> between banks on one side, and the federal government and a raft of state
> attorneys general on the other — are coming into focus.
>
> Things could change, of course, and the deal could go by the boards. But
> here’s the state of play, according to people who have been briefed on the
> negotiations but were not authorized to discuss them publicly.
>
> Cutting to the chase: if you thought this was the deal that would hold
> banks accountable for filing phony documents in courts, foreclosing without
> showing they had the legal right to do so and generally running roughshod
> over anyone who opposed them, you are likely to be disappointed.
>
> This may not qualify as a shock. Accountability has been mostly A.W.O.L.
> in the aftermath of the 2008 financial crisis. A handful of state attorneys
> general became so troubled by the direction this deal was taking that they
> dropped out of the talks. Officials from Delaware, New York, Massachusetts
> and Nevada feared that the settlement would preclude further
> investigations, and would wind up being a gift to the banks.
>
> It looks as if they were right to worry. As things stand, the settlement,
> said to total about $25 billion, would cost banks very little in actual
> cash — $3.5 billion to $5 billion. A dozen or so financial companies would
> contribute that money.
>
> The rest — an estimated $20 billion — would consist of credits to banks
> that agree to reduce a predetermined dollar amount of principal owed on
> mortgages that they own or service for private investors. How many credits
> would accrue to a bank is unclear, but the amount would be based on a
> formula agreed to by the negotiators. A bank that writes down a second
> lien, for example, would receive a different amount from one that writes
> down a first lien.
>
> Sure, $5 billion in cash isn’t *nada*. But government officials have held
> out this deal as the penalty for years of what they saw as unlawful
> foreclosure practices. A few billion spread among a dozen or so
> institutions wouldn’t seem a heavy burden, especially when considering the
> harm that was done.
>
> The banks contend that they have seen no evidence that they evicted
> homeowners who were paying their mortgages. Then again, state and federal
> officials conducted few, if any, in-depth investigations before sitting
> down to cut a deal.
>
> Shaun Donovan, secretary of Housing and Urban Development, said the
> settlement, which is still being worked out, would hold banks accountable.
> “We continue to make progress toward the key goals of the settlement, which
> are to establish strong protections for homeowners in the way their loans
> are serviced across every type of loan and to ensure real relief for
> homeowners, including the most substantial principal writedown that has
> occurred throughout this crisis.”
>
> Still, a mountain of troubled mortgages would not be covered by this deal.
> Borrowers with loans held by Fannie Mae and Freddie Mac would be excluded,
> for example. Only loans that the banks hold on their books or that they
> service for investors would be involved.
>
> One of the oddest terms is that the banks would give $1,500 to any
> borrower who lost his or her home to foreclosure since September 2008. For
> people whose foreclosures were done properly, this would be a windfall. For
> those wrongfully evicted, it would be pathetic. Roughly $1.5 billion in
> cash is expected to go into this pot.
>
> The rest of the cash that would be paid by the banks is expected to be
> split this way: the federal government would get about $750 million, state
> bank regulators about $90 million. Participating states would share about
> $2.7 billion. That money is expected to finance legal aid programs, housing
> counselors and other borrower support. If 45 states participated, that
> would work out to about $60 million apiece.
> **
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> **** **
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> Sent from my iPhone
>