Obama Bank Deal Makes Both Libs and Conservs Mad

[cybrsage]

A draft settlement between states and mortgage companies that would let the nation's biggest banks pay out billions to compensate for a raft of foreclosures has public interest groups across the political spectrum hopping mad over a deal they say was forged behind closed doors and is being strong-armed by the Obama administration.
The draft proposal, which was sent to state officials Monday for approval, is supposed to overhaul the mortgage industry and help homeowners. In it, the country's five largest mortgage lenders offer to pay out as much as $25 billion to cover new terms for homeowners driven out by foreclosure. But people who lost their homes are unlikely to get them back or see much financial benefit from the deal.


Advocates and watchdogs on both sides of the political aisle are fighting the deal, although for very different reasons.

Read more: http://www.foxnews.com/politics/201...s-detractors/ /?test=latestnews#ixzz1kj7UuFm8

Why should the banks have to give money to people who cannot pay their mortgage?

 

[Abwx]

According to J.M Keynes , if the bank owe you 1000$ , that s your problem,
but if they owe you 1 000 000 $ , that s their problem....

 

[Munky]

That settlement amounts to a slap on the wrist to the fraudsters, and more importantly, it protects them from being sued to hell and back for their fraud by the people who they defrauded.

 

[herm0016]

fraud? how is it a crime to follow a contract? We must stop supporting stupidity!

All of this rides of the backs of the people that work, pay taxes and are responsible. All that money the bank must give out is MY money. I worked for it. they did not.

we should start calling all of these programs "worker penalties"

 

[DucatiMonster696]

According to J.M Keynes , if the bank owe you 1000$ , that s your problem,
but if they owe you 1 000 000 $ , that s their problem....

Ummmm....wut?

Isn't the quote...."If you owe the bank one thousand dollars it is your problem, however if you owe them 1 million dollars it is their problem."

 

[DucatiMonster696]

That settlement amounts to a slap on the wrist to the fraudsters, and more importantly, it protects them from being sued to hell and back for their fraud by the people who they defrauded.

As it stands much the housing bubble growth from 2000 running up to the bubble bursting in 2007 and the follow up foreclosures up to 2009 were driven by house flippers who took advantage of the eased lending rules imposed by the feds and were burned once reality reared its ugly head in the markets.

So to lay all the blame solely on banks is pretty disingenuous when it was the feds who mandated the easing of lending rules and it was people looking to make a quick buck off their homes who finally collapsed the every growing housing and subsequent mortgage bubble that was building for the past few decades.

http://libertystreeteconomics.newyo...e.html?cid=6a01348793456c970c0162fd61b8cc970d

 

[jackschmittusa]

Many banks misled their customers too. They often encouraged creative form filling, even to the point of suggesting the correct numbers for the various blanks. They created imaginary scenarios to allay customer questions about adjustable rates, balloon payments, etc.. They colluded with appraisers to get whatever numbers they wanted and then presented them as true. They used terms designed to confuse their customers, concealed fees and other costs, and presented projections that really hard to evaluate.

The banks played a key role in reeling people into situations that they knew ahead of time might be disastrous for their customers. They then used illegal procedures to do mass foreclosures. They didn't pay required transfer fees or title registrations to virtually all of the state and county governments.

I won't pine if they are required to give up some of their ill-gotten gains.

 

[IonusX]

fraud? how is it a crime to follow a contract? We must stop supporting stupidity!

All of this rides of the backs of the people that work, pay taxes and are responsible. All that money the bank must give out is MY money. I worked for it. they did not.

we should start calling all of these programs "worker penalties"

you see they never had the deed to many of the houses they forclosed and then bulldozed. so actually the banks have it wrong. and need to reimburse folks. otherwise they need to fund replacing of those houses and get all possessions back form collection agencies. oh and then give them a nice window of intrest free mortgages.

what makes more sense. giving money back to ppl. or funding the rebuilding of whole cities, towns and neighborhoods. i doubt youd want to pay for the former rather than the later.

id also like to point out that you dont pay your taxes to public projects. it goes overseas as oon as it leaves your pocket mon ami.
its called fractional reserve banking.

 

[Anarchist420]

Read more: http://www.foxnews.com/politics/201...s-detractors/ /?test=latestnews#ixzz1kj7UuFm8

Why should the banks have to give money to people who cannot pay their mortgage?

Why should the banks be allowed to loan out 98% (or sometimes even more) of their liabilities?

The banks are debtors too. I think they should be foreclosed upon and transferred to their depositots.

 

[Jhhnn]

Many banks misled their customers too. They often encouraged creative form filling, even to the point of suggesting the correct numbers for the various blanks. They created imaginary scenarios to allay customer questions about adjustable rates, balloon payments, etc.. They colluded with appraisers to get whatever numbers they wanted and then presented them as true. They used terms designed to confuse their customers, concealed fees and other costs, and presented projections that really hard to evaluate.

The banks played a key role in reeling people into situations that they knew ahead of time might be disastrous for their customers. They then used illegal procedures to do mass foreclosures. They didn't pay required transfer fees or title registrations to virtually all of the state and county governments.

I won't pine if they are required to give up some of their ill-gotten gains.

They also misrepresented the risk & value of MBS sold to investors, often the mutual funds & pensions that working people depend on to finance their retirements.

Putting it off on "the Gubmint" is disingenuous, at best- Leadership matters, and the Bush Admin was *ideologically opposed* to regulation of the sacred Free Market, simply refused to do the job they were legally mandated to perform, and went so far as to stymie State regulators in the process. They exploited false prosperity & the fearmongered Terrarist Threat for re-election in 2004.

Anybody else remember the Ownership Society, or has that been blotted from the memories of our resident Righties?

Here's a reminder, a pick of Bush regulators in action-

http://economicsofcontempt.blogspot.com/2008/03/cutting-through-red-tape-with-chainsaw.html

 

[cybrsage]

I think those banks who committed fraud should be penalized and have to return cash, etc. But this would need to be proven. The deal Obama wants simply says all banks are evil and must give money to people who did not pay their mortgage for any reason whatsoever.

If I can get money for not paying my mortgage, why would I bother to actually pay it?

Just trying to undestand.

 

[DucatiMonster696]

They also misrepresented the risk & value of MBS sold to investors, often the mutual funds & pensions that working people depend on to finance their retirements.

Putting it off on "the Gubmint" is disingenuous, at best- Leadership matters, and the Bush Admin was *ideologically opposed* to regulation of the sacred Free Market, simply refused to do the job they were legally mandated to perform, and went so far as to stymie State regulators in the process. They exploited false prosperity & the fearmongered Terrarist Threat for re-election in 2004.

Anybody else remember the Ownership Society, or has that been blotted from the memories of our resident Righties?

Here's a reminder, a pick of Bush regulators in action-

http://economicsofcontempt.blogspot.com/2008/03/cutting-through-red-tape-with-chainsaw.html

If Joe Schmoe takes out a $500,000 ARM loan that he knows he cannot afford to pay off then he is equally responsible. If he did so because he was a house flipper then there no doubt of his responsibility whatsoever for the resulting actions which lead to the foreclosure of his home(s). In addition according to the most recent .Gov study (which I included above) the facts point out that the leading number of foreclosures were due to house flippers in the market who by the large took advantage of the easy of lending rules by the Feds.

So one can only conclude that this large percentage of people who comprised most of the home foreclosures according to .Gov damn well knew what they were doing and weren't these helpless and easily mislead people who you believe were forced to sign a mortgage at gun point. Now were/are their some people who were totally mislead and swindled? Probably so and in those cases more often then not there will be or is currently ongoing criminal and civil litigation and rightfully so but they are not the group who made up the bulk of foreclosed homes.


However I will restate this again. The recent highlighted facts point out that the large bulk of foreclosures (at least according to the recent .Gov data) were a result of house flippers who got caught attempting to flip homes in a market experiencing a huge bubble due to the Federal governments actions in easing lending rules which created an environment that encouraged the view that homes could be quickly flipped instead of being long term investments.

So it was this group of people who took the most risks in order to gain short term rewards made up the majority of the ranks of foreclosed homes because they miscalculated and the market came crashing down on them and this does not make them victims of "evil banks" but individuals who were profit seeking participants in the inevitable bursting of the well known housing bubble they helped to cause and took profits out of once lending rules favored this mode of investment.

 

[Anarchist420]

They also misrepresented the risk & value of MBS sold to investors, often the mutual funds & pensions that working people depend on to finance their retirements.

Putting it off on "the Gubmint" is disingenuous, at best- Leadership matters, and the Bush Admin was *ideologically opposed* to regulation of the sacred Free Market, simply refused to do the job they were legally mandated to perform, and went so far as to stymie State regulators in the process. They exploited false prosperity & the fearmongered Terrarist Threat for re-election in 2004.

Anybody else remember the Ownership Society, or has that been blotted from the memories of our resident Righties?

Here's a reminder, a pick of Bush regulators in action-

http://economicsofcontempt.blogspot.com/2008/03/cutting-through-red-tape-with-chainsaw.html

I swear if you say that Bush didn't regulate one more time I'm going to kill myself!

Bush regulated more in his first two years than Obama did in his first two
FFS.

With zero regulations these banks would be nothing more than money warehouses. The quicker people stop being dumbasses and realize that the better off society will be.

 

[fskimospy]

I swear if you say that Bush didn't regulate one more time I'm going to kill myself!

Bush regulated more in his first two years than Obama did in his first two
FFS.

With zero regulations these banks would be nothing more than money warehouses. The quicker people stop being dumbasses and realize that the better off society will be.

Considering your background and posting history, you have very little reason to call anyone a dumbass.

 

[cybrsage]

Considering your background and posting history, you have very little reason to call anyone a dumbass.

You had a golden opportunity to remove Anarchist and you missed it. 😉

 

[Jhhnn]

If Joe Schmoe takes out a $500,000 ARM loan that he knows he cannot afford to pay off then he is equally responsible. If he did so because he was a house flipper then there no doubt of his responsibility whatsoever for the resulting actions which lead to the foreclosure of his home(s). In addition according to the most recent .Gov study (which I included above) the facts point out that the leading number of foreclosures were due to house flippers in the market who by the large took advantage of the easy of lending rules by the Feds.

So one can only conclude that this large percentage of people who comprised most of the home foreclosures according to .Gov damn well knew what they were doing and weren't these helpless and easily mislead people who you believe were forced to sign a mortgage at gun point. Now were/are their some people who were totally mislead and swindled? Probably so and in those cases more often then not there will be or is currently ongoing criminal and civil litigation and rightfully so but they are not the group who made up the bulk of foreclosed homes.


However I will restate this again. The recent highlighted facts point out that the large bulk of foreclosures (at least according to the recent .Gov data) were a result of house flippers who got caught attempting to flip homes in a market experiencing a huge bubble due to the Federal governments actions in easing lending rules which created an environment that encouraged the view that homes could be quickly flipped instead of being long term investments.

So it was this group of people who took the most risks in order to gain short term rewards made up the majority of the ranks of foreclosed homes because they miscalculated and the market came crashing down on them and this does not make them victims of "evil banks" but individuals who were profit seeking participants in the inevitable bursting of the well known housing bubble they helped to cause and took profits out of once lending rules favored this mode of investment.

All true, and all immaterial. Had banking regulators been doing their jobs, and the Admin not hobbled by the ideology of Failure, flippers never would have obtained the loans made available by people gaming investors on the other side of the deal.

Lenders lowered standards drastically to increase volume & profit, pushed ticking bombs out the back door onto investors who were provided with the illusion of safety. The big reason lenders got into trouble is that investors slammed the pipeline shut abruptly, leaving a lot of those bombs still in lenders' hands... tick, tick, tick... Boom!

Flippers defaulted early on, cut their losses. The earnest & honest people still waiting for the axe to fall, those holding on despite unemployment, negative equity & high interest on two stage short term subprime ARM deals weren't in the same category, at all. Even though interest rates are now at all time lows, they can't refinance when they're underwater. They may not have been very smart, but they weren't riding the wave of greed that was so profitable for lending execs, at all.

 

[Munky]

As it stands much the housing bubble growth from 2000 running up to the bubble bursting in 2007 and the follow up foreclosures up to 2009 were driven by house flippers who took advantage of the eased lending rules imposed by the feds and were burned once reality reared its ugly head in the markets.

So to lay all the blame solely on banks is pretty disingenuous when it was the feds who mandated the easing of lending rules and it was people looking to make a quick buck off their homes who finally collapsed the every growing housing and subsequent mortgage bubble that was building for the past few decades.

http://libertystreeteconomics.newyo...e.html?cid=6a01348793456c970c0162fd61b8cc970d

I blame the banks because they knew the person getting the loan had no chance in hell of repaying it, and created securities based on those mortgages which they sold to gullible investors and pension funds as a "good deal" while betting against these same securities themselves because they knew it was dogshit and a ticking time bomb. That's fraud on multiple accounts, and I'm not even mentioning the foreclosure fraud these clowns tried to get away with.

 

[DucatiMonster696]

All true, and all immaterial. Had banking regulators been doing their jobs, and the Admin not hobbled by the ideology of Failure, flippers never would have obtained the loans made available by people gaming investors on the other side of the deal.

Lenders lowered standards drastically to increase volume & profit, pushed ticking bombs out the back door onto investors who were provided with the illusion of safety. The big reason lenders got into trouble is that investors slammed the pipeline shut abruptly, leaving a lot of those bombs still in lenders' hands... tick, tick, tick... Boom!

This is bullshit. Banks were not the ones who lowered the standards. However I will agree that they went along with the government mandate because they saw a opportunity to make money once home flipping was all the rage. However it was your beloved and all encompassing Big Brother (aka the Fed) who changed the lending rules and mandated that even unfit borrowers would not and should not be turned away by banks.

Flippers defaulted early on, cut their losses.

Most of the home defaults in 2009 were from flippers and this group is still at work in the market in terms propping up sales and causing defaults albeit at a slower rate then post 2009 due to the herd being culled.

The earnest & honest people still waiting for the axe to fall, those holding on despite unemployment, negative equity & high interest on two stage short term subprime ARM deals weren't in the same category, at all.

If someone signed into an ARM loan without the ability to pay it back within the given and well defined time frame where interest rates were at zero during the "Grace" period then they have no one to blame but themselves. The knowledge of how these types of loan agreements work have never been a secret and it was government's mandate that allowed irresponsible people to enter into these types of loans and forbade banks from disqualifying unfit borrowers because that would "RACIST" in some cases.

Even though interest rates are now at all time lows, they can't refinance when they're underwater. They may not have been very smart, but they weren't riding the wave of greed that was so profitable for lending execs, at all.

Why should they when they should of never of owned a home in the first place. If they can't afford the 20% down payment and subsequent monthly payments (along with having the ability to compensate for missing 1 or 2 payments in times of emergency on top of having home owners insurances and paying property taxes) then they probably have no business owning a home period or bought a home that was way beyond their means.

 

[DucatiMonster696]

I blame the banks because they knew the person getting the loan had no chance in hell of repaying it, and created securities based on those mortgages which they sold to gullible investors and pension funds as a "good deal" while betting against these same securities themselves because they knew it was dogshit and a ticking time bomb. That's fraud on multiple accounts, and I'm not even mentioning the foreclosure fraud these clowns tried to get away with.

To use an analogy.

Government handed out the deck of cards, rewrote the rules of the game and encourage people to walk up to the playing tables. Banks (Dealers) were mandated to issue out the cards and allow unfit people to play when in the past these people would never be allowed into the proverbial casino because everyone knew they had no money to fund their losses.

 

[RedChief]

To use an analogy.

Government handed out the deck of cards, rewrote the rules of the game and encourage people to walk up to the playing tables. Banks (Dealers) were mandated to issue out the cards and allow unfit people to play when in the past these people would never be allowed into the proverbial casino because everyone knew they had no money to fund their loses.

+1

 

[dank69]

I swear if you say that Bush didn't regulate one more time I'm going to kill myself!

...

Bush didn't regulate!

 

[Jhhnn]

This is bullshit. Banks were not the ones who lowered the standards. However I will agree that they went along with the government mandate because they saw a opportunity to make money once home flipping was all the rage. However it was your beloved and all encompassing Big Brother (aka the Fed) who changed the lending rules and mandated that even unfit borrowers would not and should not be turned away by banks.

Incorrect. Lenders were not mandated to lend. They were allowed & enabled by both the FRB & the Bush Admin through faith in the ideology of the sacred market & self regulated banking. Nobody made thme do it- they chose to do so. Even Greenspan has admitted he was wrong to do so.

Most of the home defaults in 2009 were from flippers and this group is still at work in the market in terms propping up sales and causing defaults albeit at a slower rate then post 2009 due to the herd being culled.

Simple flipping died with tightening of lending standards and the precipitious market decline. There are a limited number of investors working with distressed properties, buying them cheap, fixing them up & then either reselling or renting. They need to put a fair amount up front as a down payment or buy properties outright at this point because lenders have no buyers for flimflam mortgage securities.

If someone signed into an ARM loan without the ability to pay it back within the given and well defined time frame where interest rates were at zero during the "Grace" period then they have no one to blame but themselves. The knowledge of how these types of loan agreements work have never been a secret and it was government's mandate that allowed irresponsible people to enter into these types of loans and forbade banks from disqualifying unfit borrowers because that would "RACIST" in some cases.

There was no compulsion on the part of govt, merely extremely permissive oversight. Read about it here & elsewhere

http://skydancingblog.com/2011/01/05/us-financial-regulation-and-arbitrage-2/

Why should they when they should of never of owned a home in the first place. If they can't afford the 20% down payment and subsequent monthly payments (along with having the ability to compensate for missing 1 or 2 payments in times of emergency on top of having home owners insurances and paying property taxes) then they probably have no business owning a home period or bought a home that was way beyond their means.

The market collapsed so quickly & lending dried up so suddenly that people got caught in it, achieving negative equity virtually overnight. Add an extreme downturn in employment to the picture, with the ability to pay severely crippled for an extended period to arrive at the present situation. When their 5 year or 3 year ARM expired & they were underwater, they were at the mercy of the original lender wrt interest rates on extension of the loan because their ability to refinance elsewhere was gone. In the new tight credit scenario, lenders were free to charge exorbitant rates on upside down mortgages. One of my coworkers was briefly paying 11% until he received an inheritance which enabled him to get above water & refinance at a reasonable rate. Most people in that situation weren't so lucky & were forced to default because payments were simply too large. Lenders didn't care, because they were only the servicers, with the loans having been bundled into MBS & sold to investors.

You're blaming the victims rather than the perps.

 

[Munky]

To use an analogy.

Government handed out the deck of cards, rewrote the rules of the game and encourage people to walk up to the playing tables. Banks (Dealers) were mandated to issue out the cards and allow unfit people to play when in the past these people would never be allowed into the proverbial casino because everyone knew they had no money to fund their losses.

Is that what they teach in revisionist history? Because the last time I checked, banks spend millions of dollars lobbying the government to get what they want, not the other way around. That's not to say the government and the banks didn't collude together to screw our future and economy for the sake of keeping the illusion of perpetual "growth", but the banks have not even began to admit, nevermind pay the consequences, of the fraud they committed.

 

[Anarchist420]

75 years of housing fascism.

That is, it's due to public private partnerships, as of which couldn't exist without the government.

 

[IronWing]

This is bullshit. Banks were not the ones who lowered the standards. However I will agree that they went along with the government mandate because they saw a opportunity to make money once home flipping was all the rage. However it was your beloved and all encompassing Big Brother (aka the Fed) who changed the lending rules and mandated that even unfit borrowers would not and should not be turned away by banks.

If someone signed into an ARM loan without the ability to pay it back within the given and well defined time frame where interest rates were at zero during the "Grace" period then they have no one to blame but themselves. The knowledge of how these types of loan agreements work have never been a secret and it was government's mandate that allowed irresponsible people to enter into these types of loans and forbade banks from disqualifying unfit borrowers because that would "RACIST" in some cases.

There was no government mandate requiring lenders to make loans to unqualified borrowers. No matter how many times a week folks here post this lie, it doesn't make it anything but a lie. There simply was no mandate. The lenders were greedy and could pass off the risk to other greedy people so why not make bad loans?


Back to the topic at hand, I don't agree with government mandates for rewriting mortgage contracts to the benefit of borrowers. On the other hand, maybe it's a wee bit of payback for 2005 bankruptcy reform which saw the government rewrite trillions in existing debt contracts to the benefit of lenders.