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Thread: U.S. Mortgage Servicers in $25B Settlement

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    U.S. Mortgage Servicers in $25B Settlement

    U.S. Mortgage Servicers in $25B Settlement - Bloomberg

    Bank of America Corp., JPMorgan Chase & Co. and three other U.S. banks reached a $25 billion settlement with 49 states and the federal government to end a probe of abusive foreclosure practices stemming from the collapse of the housing bubble.
    In what the U.S. called the largest federal-state civil settlement in the nation’s history, the banks have committed $20 billion in various forms of mortgage relief plus payments of $5 billion to state and federal governments.
    “There are something like 10 million-plus homes under water to the tune of half a trillion dollars,” said Lynn Turner, the former chief accounting officer at the Securities and Exchange Commission and a managing director at consulting firm Litinomics Inc. in Los Angeles. “I don’t think this settlement, which lets all the bank executives off the hook for filing false documents with courts, is going to make much of a dent.”
    The accord announced today in Washington was 16 months in the making, following a move by states to investigate bank foreclosure practices in 2010. The deal will “begin to turn the page on an era of recklessness” that led to the housing bubble, President Barack Obamasaid today in Washington, where he was joined by administration officials and state attorneys general.
    This was a pretty big story today. I have mixed feelings about it.

    First, there was significant pressure on the state attorney generals by the Obama administration to go through with the settlement.

    Second, the settlement relieves enormous legal uncertainty by finally settling on a national level on how banks will go through the foreclosure process.

    Thirdly, The Obama administration has touts this as further homeowner assistance, in the form of principal reductions, further refinancing options for underwater and current borrowers, and a $2,000 check for people who were recently foreclosed on (there's more, these seemed the most important.

    Fourthly, this is another example of the federal government settling with large banks who are guilty of illegal mortgage practices. That will be sure to leave a bad taste in many Americans mouth as more banks are learning they can break the law as long as they can pay off the federal government afterward.

    Number #2 is healthy for the real estate market so I'm glad this is over with. Number #3 is fine with me as long as the refinancings are voluntary by both parties and are done in a responsibile way. Number #1 and #4 suck. Both set bad precedents for future cases like this one.

    Would love to hear what people think.
    "There is an excellent correlation between giving society what it wants and making money, and almost no correlation between the desire to make money and how much money one makes." ~Dalio

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    Re: U.S. Mortgage Servicers in $25B Settlement

    Dem's got us into this fix by demanding that banks make loans easier for poor people (unqualified borrowers) to get and now they are going to double down by demanding these same people get a bailout. When is it my turn for a bailout?

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    Re: U.S. Mortgage Servicers in $25B Settlement

    Quote Originally Posted by sawyerloggingon View Post
    Dem's got us into this fix by demanding that banks make loans easier for poor people (unqualified borrowers) to get and now they are going to double down by demanding these same people get a bailout. When is it my turn for a bailout?

    You and me both....Nah, we are current, and do what we agreed to when we sat at the settlement table, so in that case we are the evil rich that don't need a bailout....

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    I don't see how you guys view this as a bailout. This is not taxpayer money, it's a settlement with banks that were charged with illegal/unethical mortgage practices.
    "There is an excellent correlation between giving society what it wants and making money, and almost no correlation between the desire to make money and how much money one makes." ~Dalio

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    Re: U.S. Mortgage Servicers in $25B Settlement

    Quote Originally Posted by Rhapsody1447 View Post
    I don't see how you guys view this as a bailout. This is not taxpayer money, it's a settlement with banks that were charged with illegal/unethical mortgage practices.
    It's a bail out because if left to the courts and the states the banks would be paying out far, far more.

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    Quote Originally Posted by 1Perry View Post
    It's a bail out because if left to the courts and the states the banks would be paying out far, far more.
    What constitutes a bailout then? You don't know what would have happened if it was left to the states. Removing that uncertainty is one of the positive elements of this settlement.
    "There is an excellent correlation between giving society what it wants and making money, and almost no correlation between the desire to make money and how much money one makes." ~Dalio

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    Re: U.S. Mortgage Servicers in $25B Settlement

    Quote Originally Posted by Rhapsody1447 View Post
    What constitutes a bailout then? You don't know what would have happened if it was left to the states. Removing that uncertainty is one of the positive elements of this settlement.
    2K for someone who lost their home due to illegal practices is a bail out...of the bank.
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

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    Re: U.S. Mortgage Servicers in $25B Settlement

    Quote Originally Posted by Rhapsody1447 View Post
    I don't see how you guys view this as a bailout. This is not taxpayer money, it's a settlement with banks that were charged with illegal/unethical mortgage practices.
    It is a bailout because the obama administration is finding a way for people not to honor the contracts they signed. They are doing the usual socialist thing, going after private property by redistributing wealth AND you are right, the banks were CHARGED with illegal practices, not tried not convicted. Obama is forcing them to do this with the threat of worse things to come just like Dem's forced them to give loans to unqualified borrowers.

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    Re: U.S. Mortgage Servicers in $25B Settlement

    Quote Originally Posted by Rhapsody1447 View Post
    U.S. Mortgage Servicers in $25B Settlement - Bloomberg



    This was a pretty big story today. I have mixed feelings about it.

    First, there was significant pressure on the state attorney generals by the Obama administration to go through with the settlement.

    Second, the settlement relieves enormous legal uncertainty by finally settling on a national level on how banks will go through the foreclosure process.

    Thirdly, The Obama administration has touts this as further homeowner assistance, in the form of principal reductions, further refinancing options for underwater and current borrowers, and a $2,000 check for people who were recently foreclosed on (there's more, these seemed the most important.

    Fourthly, this is another example of the federal government settling with large banks who are guilty of illegal mortgage practices. That will be sure to leave a bad taste in many Americans mouth as more banks are learning they can break the law as long as they can pay off the federal government afterward.

    Number #2 is healthy for the real estate market so I'm glad this is over with. Number #3 is fine with me as long as the refinancings are voluntary by both parties and are done in a responsibile way. Number #1 and #4 suck. Both set bad precedents for future cases like this one.

    Would love to hear what people think.
    Obama is ****ing us, guess who ends up paying the $25B? We do.
    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
    "Fly-over" country voted, and The Donald is now POTUS.

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    Re: U.S. Mortgage Servicers in $25B Settlement

    I’m with you on the mixed feelings. Some random thoughts:

    $20b is a pitifully small amount. These 5 will likely see no effect on their balance sheets from it.

    Considering the average home price is around $200k I don’t see how $2k (20b/10m) is going to do much.

    I’ve heard many economist/pols state the issue to be the necessity of the write down of the home values to effect the correction of the bubble but no one wants to bear the loss. This $20b is only a dink compared to the $500b problem mentioned in the article. Until this is addressed significantly the housing market will continue to slug along.

    At least the government is not paying for this…

    Ultimately yes Americans will pay for this through bank fees and other ‘hidden’ devices but it will probably be cheaper than the Feds managing it (more than they will under the current arrangement).

    The threat of moral hazard has only marginally been addressed especially considering the paltry amount.

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