For weeks I have listened to complaints about Obama’s coming deal with the big banks that was sure to leave main street Americans out in the cold while giving criminal Banksters a get out of jail free card. Today that deal arrived. It is a modest down payment on what the US needs to restore the housing market on main street. Given the Republican Party’s unwillingness to do anything at the federal level to help suffering Americans, it was the best Obama could do, with the help of State Attorneys General from both parties from every state but Oklahoma, whose AG sided with the Banksters. The deal neither leaves main street Americans out in the cold, nor does it give criminal Banksters a get out of jail free card.
State and federal officials on Thursday announced a settlement of more than $25 billion with five of the nation’s banks over their flawed and fraudulent foreclosure practices. It is the largest government-industry settlement in more than a decade.
The deal aims to help troubled borrowers by reducing the amount they owe on their mortgages, lowering their interest rates and paying restitution to homeowners who suffered mortgage-related abuses. It will force lenders to revamp how they interact with troubled homeowners and bar them from trying to foreclose on borrowers while simultaneously negotiating mortgage modifications.
In addition, firms will have to make sure borrowers have a single point of contact with a lender, rather than being shuttled to different employees with each interaction…
Inserted from <Washington Post>
Here are more details about the deal.
KEY PROVISIONS OF THE SETTLEMENT
Immediate aid to homeowners needing loan modifications now, including first and second lien principal reduction. The servicers are required to work off up to $17 billion in principal reduction and other forms of loan modification relief nationwide.
State attorneys general anticipate the settlement’s requirement for principal reduction will show other lenders that principal reduction is one effective tool in combating foreclosure and that it will not lead to widespread defaults by borrowers who really can afford to pay.
Immediate aid to borrowers who are current, but whose mortgages currently exceed their home’s value. Borrowers will be able to refinance at today’s historically low interest rates. Servicers will have to provide up to $3 billion in refinancing relief nationwide.
Immediate payments to borrowers who lost their homes to foreclosure with no requirement to prove financial harm and without having to release private claims against the servicers or the right to participate in the OCC review process. $1.5 billion will be distributed nationwide to some 750,000 borrowers.
Immediate payments to signing states to help fund consumer protection and state foreclosure protection efforts.
First ever nationwide reforms to servicing standards; something that no other federal or state agency has been able to achieve. These servicing standards require single point of contact, adequate staffing levels and training, better communication with borrowers, and appropriate standards for executing documents in foreclosure cases, ending improper fees, and ending dual-track foreclosures for many loans.
State AG oversight of national banks for the first time. Something no court could award.
- National banks will be required to regularly report compliance with the settlement to an independent, outside monitor that reports to state Attorneys General.
- Servicers will have to pay heavy penalties for non-compliance with the settlement, including missed deadlines.
BANKS ARE STILL ACCOUNTABLE FOR OTHER CLAIMS NOT COVERED BY THIS SETTLEMENT
This agreement holds the banks accountable for their wrongdoing on robo-signing and mortgage servicing. This settlement does not seek to hold them responsible for all their wrongs over the years and the agreement and its release preserve legal options for others to pursue. Specifically, this settlement does not:
- Release any criminal liability or grant any criminal immunity.
- Release any private claims by individuals or any class action claims.
- Release claims related to the securitization of mortgage backed securities that were at the heart of the financial crisis.
- Release claims against Mortgage Electronic Registration Systems or MERSCORP.
- Release any claims by a state that chooses not to sign the settlement.
- End state attorneys general investigations of Wall Street related to financial fraud or the financial crisis.
The agreement settles only some aspects of the banks conduct related to the financial crisis (foreclosure practices, loan servicing, and origination of loans) in return for the second largest state attorneys general recovery in history and direct relief to distressed borrowers while they can still use it.
State cases against the rating agencies and bid-rigging in the municipal bond market, for example, continue. Claims and investigations against MERS and how Wall Street packaged mortgages into securities also continue.
On January 27 U.S. Attorney General Eric Holder along with Housing and Urban Development (HUD) Secretary Shaun Donovan, Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami and New York Attorney General Eric Schneiderman announced the formation of the Residential Mortgage-Backed Securities Working Group. The working group will investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities.
Inserted from <http://www.nationalmortgagesettlement.com/about>
Rachel Maddow covered the deal in two segments.
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In the second, she interviewed Eric Schneiderman about the deal.
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All things considered this is acceptable. There is far more that needs to be done, but this is a first step in the right direction. When people tell you there is no difference between the parties, ask them if the Republicans would have done this.
12 Responses to “We Spoke Out; Obama listened!”
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I’d like to see some folks sitting in a cell. A lot of them, and a few of their Congressional lackeys with them, for good measure.
“The deal neither leaves main street Americans out in the cold, nor does it give criminal Banksters a get out of jail free card.”
The best is yet to come for the Banksters…
More yet to come OK– but this is not a bad deal for the first step- provides for immediate relief and help-while leaving the door wide open for further righting of all the wrongs — good deal
Amen to all the above!
No, RepublicanTs would not have done this. Their puppet-masters wouldn’t like it.
Bingo!
I’ll align myself with what Elizabeth Warren said today:
Excellent Nameless! She echoes my sentiments perfectly.
I have to say that I am very impressed with the direction that is being taken. You know that tingly sense of pride you get when something good and right is happening? Well I got it and half an hour after watching and reading about this, I still have it. I found myself, a Canadian mortgage banker (not bankster), proud of Mr Obama and the state Attorneys General for standing up for the American people. I also found myself wanting to work with them to right these wrongs, but alas I am a Canuck so that won’t happen, but I can still cheer! And I am proud of all those who let the administration know how they feel through petitions, rallies, notes to their representatives, OWS. I know that I signed several petitions about this because it was the right thing to do.
I have been saying for the past 6-8 months that any recovery from the financial crisis, and indeed any errors of past administrations, will take time. Today’s troubles have been thirty years or more in the making, aided by intransient current legislators. Nobody can just undo the past mistakes as if they didn’t happen. Just not possible! But the American people can move forward with this. As Eric Schneiderman said, this does not close any doors on future and ongoing investigations and legal proceedings.
I am also particularly pleased to see that all states Attorneys General, Republican and Democrat alike, with the exception of the Oklahoma Republican Attorney General, are committed to working together to sort this mess out. This is a bipartisan mess that needs a bipartisan solution. And to the Oklahoma Attorney General I would say, start boxing up your office because I doubt you’ll be in office for very long!
TomCat: ” The deal neither leaves main street Americans out in the cold, nor does it give criminal Banksters a get out of jail free card.” AMEN!
I have to also say that the first part of the Rachel Maddow Show showed Republicans on four or five issues a number of years ago, and then those same Republicans more recently on those same issues. The two are diametrically opposed. Now I know where Mitt Rmoney gets the “Mr Flip-flop” title. Each Republican shown was doing flip-flops. Can you trust group that makes the “flip-flop” an art form?
Well, maybe you have your own Banksters there, that are in league with Harper’s harlots.
As a rule, the role of state AG is not as political as some. He/she is the lawyer that represents the state and the meltdown has hurt all the states.
TYVM.
No.
Something that I noticed earlier but forgot to mention are the ‘For Sale’ signs on properties. Here in BC, and I believe in the rest of the country, a realator may not advertise a property as a ‘foreclosure’ on any signage etc. nor may he/she advise a potential buyer. It is not known to be a foreclosure until an offer of purchase is made and at that point the contract is between the bank/mortgage holder and the purchaser. Part of the reason is to prevent low ball offers. The banks/mortgage holders have an abligation to get a market price. After all costs are accounted for, the person who was foreclosed on gets the remainder. Usually there is little if any surplus but it has happened.
That makes more sense.