House Of Pain

Foreclosuregate rattles on, and it looks like the banks are going to lose their pound of flesh, in this case, $25-$26 billion over three years, in order to get off the hook for roughly 100 times that in real damage to the economy.

The final details of the pact were still being negotiated Wednesday night, including how many states would participate and when the formal announcement would be made in Washington. The two biggest holdouts, California and New York, now plan to sign on, according to the officials with knowledge of the matter who did not want to be identified because the negotiations were not completed.

The deal grew out of an investigation into mortgage servicing by all 50 state attorneys general that was introduced in the fall of 2010 amid an uproar over revelations that banks evicted people with false or incomplete documentation. In the 14 months since then, the scope of the accord has broadened from an examination of foreclosure abuses to a broad effort to lift the housing market out of its biggest slump since the Great Depression. Four million Americans have been foreclosed upon since the beginning of 2007, and the huge overhang of abandoned homes has swamped many regions, like California, Florida and Arizona.

In New York State, more than 46,000 borrowers will receive some form of benefit, with an estimated 21,000 expected to see what they owe reduced through a principal reduction, according to estimates by the Department of Housing and Urban Development.

The five mortgage servicers in the settlement — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — have largely set aside reserves for the expected cost of the accord and investors are likely to cheer its announcement because it removes one more legal worry for the industry, analysts said.

“I wouldn’t say it’s a panacea for the housing industry but it is good for the banks to get this behind them,” said Jason Goldberg, an analyst with Barclays.

Of course it is.  And yes, about a million underwater homeowners will get some relief.  But ten million will not, and the housing depression will remain for another 3-5 more years at the minimum.  There’s still hope that the robosigning outfits like MERS are going to still face legal action, but for the most part, the banks are getting away with murder, the housing depression is going nowhere, and the bulk of homeowners won’t see a dime from this settlement.

Is it better for the million or so homeowners who will see something get that money?  Absolutely.  But the cost is brutally high for that aid and the people responsible for this mess still won’t face prison.

And yet…given the circumstances, it was the best we could hope for.  Yves Smith gives us a dozen reasons why the deal should depress you.  The biggest one?

We’ll now have to listen to banks and their sycophant defenders declaring victory despite being wrong on the law and the facts. They will proceed to marginalize and write off criticisms of the servicing practices that hurt homeowners and investors and are devastating communities. But the problems will fester and the housing market will continue to suffer. Investors in mortgage-backed securities, who know that services have been screwing them for years, will be hung out to dry and will likely never return to a private MBS market, since the problems won’t ever be fixed. This settlement has not only revealed the residential mortgage market to be too big to fail, but puts it on long term, perhaps permanent, government life support. 

There’s a reason I think the housing depression will last into 2017 or longer. Foreclosures will continue to pile up, and home prices will continue to drop.  And all the while, the banksters are making out like bandits.  As Matt Taibbi says, Wall Street should stop whining.

The financial services industry went from having a 19 percent share of America’s corporate profits decades ago to having a 41 percent share in recent years. That doesn’t mean bankers ever represented anywhere near 41 percent of America’s labor value. It just means they’ve managed to make themselves horrifically overpaid relative to their counterparts in the rest of the economy.

A banker’s job is to be a prudent and dependable steward of other peoples’ money – being worthy of our trust in that area is the entire justification for their traditionally high compensation.

Yet these people have failed so spectacularly at that job in the last fifteen years that they’re lucky that God himself didn’t come down to earth at bonus time this year, angrily boot their asses out of those new condos, and command those Zagat-reading girlfriends of theirs to start getting acquainted with the McDonalds value meal lineup. They should be glad they’re still getting anything at all, not whining to New York magazine.

And our economy gets to foot the bill.  Nice.  Is this Obama’s fault?  No.  Congress, Washington, lobbyists, Fannie, Freddie, the banks, MERS, all this was put into motion well before Barack Obama ever set foot in the Oval Office.  I’m not expecting this to be fixed in 3 years, hell it’ll take 3 decades before home prices are back to 2006 levels…if then.  And it’s not like bankrupting the banks and putting hundreds of thousands of bank employees who were not responsible for this disaster out of work is a viable solution either.

Is this the best we can hope for right now?  Unless the makeup of the House and Senate changes substantially in the “let’s clone Elizabeth Warren a couple hundred times” direction, yes.  Political reality is political reality, just like the economic reality of the housing depression is reality.  Some homeowners are getting help, and the banks are paying for it.  McCain would have done nothing.  Certainly his DoJ would have done everything possible to insulate the banks from any settlement.  (PS, the one state not joining?  Oklahoma.  Their AG says the banks should not be held liable at all.  Period.)

But this is a win for the forces of greed and evil, because they set all this up as legal well before it happened.  It’s depressing and I hate it.  But we know how to fix it.  We can start in November.

55 replies
  1. 1
    Villago Delenda Est says:

    I frankly will not be happy until banksters are hanging from lampposts.

    These thieving motherfuckers need to pay for their crimes.

  2. 2
    Yossarian says:

    Wait, servicing violations alone caused “100 times” $25 billion in real damage to the economy? Because that’s all this settlement covers. It doesn’t cover origination or securitization, which is where the broader problem started. And it doesn’t negate criminal liability.

  3. 3
    Martin says:

    They should have insisted on having the banks refi for free, anyone underwater with a new mortgage at current rates for the remainder of the original mortgage as Obama suggested in the SOTU. In addition to the $25B. It wouldn’t have cost the banks much given what the rate the fed is giving them money, and it would have provided a broad benefit to all underwater mortgage holders far in excess of the value of the $25B.

    And I’ve heard that this settlement doesn’t prevent future charges being leveled. It just wipes out one layer of the issue. But I’m not sure that’s true.

  4. 4
    Linnaeus says:

    Crime pays, as long as you commit the right crimes.

  5. 5
    Constance says:

    In my area housing prices were so speculated and so out of reason that they should never come back to 2008 levels. Developers, lenders and real estate maggots worked actively to keep turning houses and inflating prices till it was ridiculous. It looks to me like the 2 million people illegally foreclosed on will net about 12,500 each and that does not take into consideration any attorney fees so I’m wondering what the hell they will do with their pittance award?

  6. 6
    LittlePig says:

    1% penalty? That’s just the cost of doing business.

    This isn’t even a slap on the wrist.

  7. 7
    rob in dc says:

    Yes this is Obama’s fault, he controls the DOJ and has the power to indeed create justice should that be a priority for him. His priority is to keep the financial industry happy, placated and generally doing as well as possible given the magnitude of their epic fuck ups.

    This deal is just another bailout to the bankers written in whole by Obama and his treasury. No one else deserves more credit for this bailout (even Geithner has to take orders from Obama).

    And no these banks didn’t have to be dismantled and everyone fired for some justice to be served, although that is exactly what should have been done in 2009 and still remains what should be done now. But executives and middle level employees need to go to jail en masse at minimum for anyone in this country to believe that justice operates equally for all.

    Obama has singlehandedly done more to damage the paradigm that no man is above the law in this country than any person previously. His DOJ is a disgrace, blind deaf and dumb to white collar crime. He will pay for this and all his previous actions eventually, maybe not in the next election but down the line his willingness to put the convenience of the banks over justice will not be looked kindly upon by history.

  8. 8
    El Tiburon says:

    And our economy gets to foot the bill. Nice. Is this Obama’s fault? No.

    Interesting.

    Another take from Hamsher’s Devil Hole here.

    The Obama Administration has followed a predictable pattern we now recognize. It has consistently functioned like criminal defense counsel, whose mission is to get their criminal clients, the major corporations and executives who fund their elections, off with no admission of guilt, no forced resignations, and as little harm to their reputation, or that of the counsel, as possible. To do this, they neutralize anyone with an ounce of public purpose in their veins.

    You make the call.

  9. 9
    burnspbesq says:

    @rob in dc:

    Yes this is Obama’s fault, he controls the DOJ and has the power to indeed create justice should that be a priority for him.

    No, dumbfuck, it’s not. In case you slept through civics class, Congress makes the laws. DOJ and the state attorneys general have made the best deal they can make within the framework of existing law. I don’t like this deal any more than you do, but I have the advantage of being conversant with reality.

    If you can show me where in Article II of the Constitution the President is granted the power to “indeed create justice,” I’ll recant this comment. Good luck with that.

  10. 10
    burnspbesq says:

    Yo, Zandar, did we have fun last night?

    Stealing a win in the Dean Dome is the bestest thing there is.

  11. 11
    4tehlulz says:

    FT Alphaville has the agreement.

    This will be the paragraph everyone ignores:

    The settlement does not grant any immunity from criminal offenses and will not affect criminal prosecutions. The agreement does not prevent homeowners or investors from pursuing individual, institutional or class action civil cases against the five servicers. The pact also enables state attorneys general and federal agencies to investigate and pursue other aspects of the mortgage crisis, including securities cases.

  12. 12
    burnspbesq says:

    @El Tiburon:

    You make the call.

    OK.

    Scarecrow is clueless.

  13. 13
    burnspbesq says:

    @Martin:

    They should have insisted on having the banks refi for free, anyone underwater with a new mortgage at current rates for the remainder of the original mortgage as Obama suggested in the SOTU.

    As a general rule, it’s difficult to get something in settlement negotiations if it’s not a remedy that you could get if you went to trial and won.

  14. 14
    Hill Dweller says:

    @burnspbesq: Two overrated teams that won’t make any noise in the tournament, provided they get fair draws. If Duke gets the type draw they got in ’11, all bets are off.

  15. 15
    Rawk Chawk says:

    Zandar, question: Do you hold President Obama responsible for ANY failure of any kind in the last three years?

  16. 16
    Zandar says:

    @burnspbesq:

    Yes. No way we shoulda won that. But we did.

  17. 17
    El Tiburon says:

    @burnspbesq:

    Scarecrow is clueless.

    I appreciate your thoughtful and nuanced response.

    But perhaps you could elaborate.

  18. 18
    Hill Dweller says:

    Sorry, my last post should say the draw they got in ’10.

  19. 19
    Cap'n Magic says:

    @4tehlulz: Given the high barriers to entry on individuals successfully getting either State or Federal entities to take on cases, this is just hand-waving of the worst kind. As Yves pointed out in her first point:

    1. We’ve now set a price for forgeries and fabricating documents. It’s $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust. It is a fraction of the cost of the legal expenses when foreclosures are challenged. It’s a great deal for the banks because no one is at any of the servicers going to jail for forgery and the banks have set the upper bound of the cost of riding roughshod over 300 years of real estate law.

  20. 20
    Rawk Chawk says:

    @rob in dc:

    Obama has singlehandedly done more to damage the paradigm that no man is above the law in this country than any person previously. His DOJ is a disgrace, blind deaf and dumb to white collar crime. He will pay for this and all his previous actions eventually, maybe not in the next election but down the line his willingness to put the convenience of the banks over justice will not be looked kindly upon by history.

    Oh my. How uncivil and shrill.

    And accurate.

  21. 21
    El Tiburon says:

    @burnspbesq:

    If you can show me where in Article II of the Constitution the President is granted the power to “indeed create justice,” I’ll recant this comment. Good luck with that.

    The Strawman store called and wants its big fucking straw -man back you just constructed here.

    Ask Anwar Al-Awlaki about Obama’s “instant justice” not found so much in the Constitution. But it is nice to know you are an Originalist. When is your next Tea Party?

  22. 22
    Rawk Chawk says:

    @El Tiburon:

    THIS is a thing of beauty:

    The Obama Administration has followed a predictable pattern we now recognize. It has consistently functioned like criminal defense counsel, whose mission is to get their criminal clients, the major corporations and executives who fund their elections, off with no admission of guilt, no forced resignations, and as little harm to their reputation, or that of the counsel, as possible. To do this, they neutralize anyone with an ounce of public purpose in their veins.

    “Devil Hole.” LOL

    You watch: Once elected, Elizabeth Warren will be neutralized in D.C. Just the fact that she says what she says so brazenly while campaigning sheds a harsh light on the lack of action by the O administration, and makes them look bad. That won’t continue.

  23. 23
    Rawk Chawk says:

    @burnspbesq:

    No, dumbfuck, it’s not. In case you slept through civics class, Congress makes the laws. DOJ and the state attorneys general have made the best deal they can make within the framework of existing law. I don’t like this deal any more than you do, but I have the advantage of being conversant with reality

    Same old burnie…OBAMA CAN’T DO ANYTHING, BUT WE DESPERATELY NEED HIM IN OFFICE. What a joke.

    and of course with the instant name calling. It’s all Bots have here to fall back on.

  24. 24
    RobinDC says:

    Really burn i guess your conversation with reality never got around to these things called perjury laws. Almost everything this settlement clears could have been prosecuted under those laws which exist in all 50 states. And while the more attenuated fraud elements of the servicers conduct are more difficult to prove they would also be possible in at least some states. Obama’s doj and hud pushed for this settlement bringing the full weight of federal power to bear so that the ags would support this whitewash.

    As to the lack of release we will see if the government indeed takes any follow up action after this settlement. I’ll go out on a limb here and say its unlikely beyond some show trials of small players when we get.closer to the election.

  25. 25
    Rawk Chawk says:

    @burnspbesq:

    As a general rule, it’s difficult to get something in settlement negotiations if it’s not a remedy that you could get if you went to trial and won.

    And we know the O administration doesn’t do “difficult,” when it comes to the Big Money folks.

    Herculean efforts are reserved for the prosecution of people like Bradley Manning, history’s greatest monster.

  26. 26
    RP says:

    Threads like this are good for keeping the stupid concentrated in one place.

  27. 27
    WereBear says:

    Political reality is political reality, just like the economic reality of the housing depression is reality. Some homeowners are getting help, and the banks are paying for it. McCain would have done nothing. Certainly his DoJ would have done everything possible to insulate the banks from any settlement. (PS, the one state not joining? Oklahoma. Their AG says the banks should not be held liable at all. Period.)

    Zandar is right.

    And that’s what happens when everyone gets fat and happy and complacent and figures “this is the way it is.” No, it got that way with people bleeding and dying to get us the forty hour week, the paid vacation, the child labor laws and OSHA and a million other things that let the whiners, whine.

    Don’t like it? Change it! By voting.

  28. 28
    scav says:

    @Rawk Chawk: Most people don’t name their two neurons. Good on you.

  29. 29

    I don’t like this deal any more than you do, but I have the advantage of being conversant with reality.

    Chortle.

    The number one reason this deal is the best we can get is because our President is Obama, and he’s in the pocket of the banks.

    He, and Holder, and Geithner, and Mary Shapiro have spent the last three years enriching and protecting the banks.

    And you folks have spent the last three years inventing ever more shameless apologies for same.
    ~

  30. 30
    Rawk Chawk says:

    @ifthethunderdontgetya™³²®©:

    Oh my.

    More incivility and truth.

  31. 31
    liberal says:

    @burnspbesq:

    DOJ and the state attorneys general have made the best deal they can make within the framework of existing law.

    LOL.

  32. 32
    Zandar says:

    You know what?

    Fuck the haters. Seriously.

    What the fuck is YOUR solution to this other than to say “Obama sold us out!”

    What’s your solution to FIX the root cause? More Republicans? More complaining? More abstention from the voting both? Sternly worded letters? Paper cuts? Fucking what?

    Jesus wept.

  33. 33
    MosesZD says:

    I lived in Nashville, TN and sold my house in October of 2011. I thought the house would be fairly valued at $250 and told my realtor we should start at $255. I based this on my “Zillow Estimate” which I had found to be highly accurate for houses in my neighborhood.

    My realtor, still living in the bubble-mentality, listed it at $285K. First day it was for sale I got an offer for $250k. Which I took because, as a CPA who had a strong real-estate/construction client-basbeforeor I sold my practice, I followed things like the Case-Shiller price index. Which, based on historical precedents, indicated to me I should expect, over the next three years, to watch my house continue to decline in value and, eventuallystabilizeze at 190K to 200K from it’s artificially inflated high of $300K.

    I’m sure the people who bought it thought they got a great deal. At least at the time. But it’s February now and the Zillow Estimate does not reflect their $250K purchase price (though it notes it), but rather the sad fact the house has declined about $14K in absolute value in the past four-and-one-half months and that they are now, loan-to-value, upside down when one factors in closing/selling expenses.

    Personally, I’m thinking 2014 (at best case scenario) the earliest time I’ll start looking for a replacement. But as OP said, 2017 maybe even better because there is still a ton of trash in the system. And it may be that long before we should arrive at the bottom of the market and all those houses with title problems should be readily ascertainable.

  34. 34
    superking says:

    This settlement is weak tea, but not for the reasons identified by Yves Smith. The quote you pulled out is particularly wrong-headed. The settlement breaks down into three funds that will be used to “help” homeowners. The first fund is just money that is going straight to people who lost their home to foreclosure between 2008 and 2011. This is cold hard cash.

    The second fund is money that will be used to refinance borrowers who are current into lower rate mortgages. The third fund is money that will be used to write down principal balances. These funds aren’t hard money, but just and “credit” held by the bank that gets satisfied over time as the bank modifies loans or refinances people. In short, the banks are paying money to themselves to make this happen, but the way it will work is that the money will be sent to the investor in order to satisfy part of the mortgage. If your loan is securitized and you need a principal reduction mod, the way to reduce the principal is to pay it off. That pay off goes to the investor.

    So, the settlement is going to actually pay investors while attempting to create affordable payments for homeowners.

    The bad news here is that there are no principal reduction modification programs in place, and the settlement has no hard deadlines for the banks to create them. Oh, right, the banks get to design their own programs. THAT is a reason to hate this settlement. It’s being announced today, but any assistance to homeowners is months away and will be on terms defined by the banks themselves.

  35. 35
    MosesZD says:

    @Zandar:

    It’s very simple. Unless your force accountability, politicians won’t work for you, they’ll work for those who pay them.

    The first step in political accountability is NOT PUTTING THE ASSHOLES WHO ARE FUCKING YOU OVER BACK IN POWER. Sure, you may have SHORT-TERM PAIN, but you get long-term health.

    And it’s people like YOU who are the problem. I’ve got no fucking problem not voting for Obama. I’m not going to cower under my bed worrying that Mitt Romney is going to be President and flock, like a moronic sheep, to Obama because “Romney will be worse…”

    I don’t see how, honestly. Obama has cemented into place, or even expanded upon, some of the most regressive and horrible executive power abuses conducted by Bush.

    Bottom line, if one party makes a mistake, the other party needs to correct it. But when they go along with it, it becomes a policy that is extraordinarily difficult to get rid of… Like the idiotic war on drugs. The spreading hate and anti-Americanism everywhere with the illegal and immoral drone war.

  36. 36
    rob in dc says:

    No how about a concerted action to prosecute white collar criminals, you know the job the DOJ is supposed to do in the first place?

    Have you forgotten what its like to have a DOJ that actually does its job or something? I mean the Clinton DOJ wasn’t perfect but they were a step up from this crap.

    That’s the solution, its not complex at all, but it requires the basic desire to put the interests of the commonwealth above the interests of campaign donors. The best Obama can do is actions for the common weal that don’t hurt his financiers. In this case that compromised position is purely a stance for injustice, the flaws of this candidate become glaring as a consequence.

    As for action, well I just told Schneiderman to go fuck himself and he wouldn’t be seeing another cent from me in the future. I gave up on active supporting Obama a while ago. Now going forward i’ll invest most of my energy into private actors who are doing what they can on this issue and others I care about.

    Also I would like to point out one thing, I didn’t comment on a post ABL wrote but it very clearly articulated something that I think was important for explaining the mindset that a lot of us have. She was weighing the difference between Obama and Ron Paul and admitted that under Paul it’s likely people in foreign countries would suffer less than they do under Obama, but given what she would experience here at home if Paul was president she was willing to ignore that in favor of her own self interest.

    Its a supremely logical position to take, one that I basically agree with. So what then should people whose primary interest is justice, retribution and a general shoring up of the foundations that prop up the middle class supposed to do. That clearly isn’t Obama’s area interest at all, despite his campaign rhetoric. The republican’s are worse, so we will still vote for Obama but we don’t have to fall happily in line about it.

    Jesus wept indeed.

  37. 37
    Can't Be Bothered says:

    I frankly have no idea if this is a good deal or not. Given corporate capture of the regulatory process and the amount of state AGs signing on, it’s probably decent. I mean you all realize that part of settling is accepting a sure lesser amount in exchange for giving up the chance at more. All I see is a lot of uninformed people screaming, bc any deal that doesn’t magically involve all the big banks being bankrupted and criminal charges (for a civil case) is ZOMG HE SOLD US OUT!! And the doomsdayism on display is crazy. This settlement somehow means the government is permanently responsible for mortgages? The housing market will decline five more years and not recover for thirty? That is laughable. It’s actively contributing to stupidity.

  38. 38
    GARY CAMPBELL - So the BITCHEZ CAN READ IT-IF they can READ! says:

    I call on ANY American of conscience to not vote ever again for this rotten president as he is a co-conspirator in this crime perpetrated against millions of American citizens.
    This fucker is probably working for the Taliban.
    His worthless un-American ass needs to be primaried.
    I will vote for Mickey Mouse before I or anyone I have influence over will vote for him again.
    Enough is Efuckinnough!
    Get this trick into the trash bin of history where he belongs!

  39. 39
    superking says:

    @Can’t Be Bothered:

    I know you’re talking to a lot of other people, but I actually kind of know what is in the settlement.

  40. 40
    Rawk Chawk says:

    @Zandar:

    Fuck the haters. Seriously.

    Remind me again why you are a front pager?

  41. 41
    BobS says:

    @burnspbesq: Yes, dumbfuck, it is. In case you slept through the last three years, the Obama DOJ has been less than diligent investigating whether existing laws have been broken.
    But you can be certain that this deal will be featured prominently in Obama’s re-election campaign as an example of how he took on Wall Street and won.

  42. 42
    Tone In DC says:

    These oh-so-pure folks never seem to have an actual pragmatic solution to these concrete, messy (and heretofore pretty much intractable) problems. They just spew like Mount St. Helen’s.

  43. 43
    KS in MA says:

    Schneidermann’s webpage makes it pretty clear that this settlement doesn’t prevent further action…

    http://www.ag.ny.gov/media_cen.....9a_12.html

  44. 44
    Rawk Chawk says:

    @Tone In DC:

    These oh-so-pure folks never seem to have an actual pragmatic solution to these concrete, messy (and heretofore pretty much intractable) problems. They just spew like Mount St. Helen’s.

    This old, lame ass trope. OBAMA was elected to solve these problems, not me or anyone else. We have jobs already. Presidentin’ is HIS job.

  45. 45
    paulie46 says:

    @WereBear: “Don’t like it? Change it! By voting.”

    Yeah that’ll help. We get to vote for people that come pre-owned by corporate cash.

    Can you name five congress-critters currently in office that actually go to the mat for the working man? And if you could what could those few possibly change?

    Both current political parties are un-principled – everything is for sale, everything is negotiable and what we want is not part of the deal.

  46. 46
    lacp says:

    I’m curious why Obama is being singled out as the Bank-Owned Betrayer. Can anyone think of a single Democrat or Republican who would stand a chance of getting the presidential nomination who isn’t owned by the banksters? He’s not some exceptional case – the system we have is screwed up in favor of the 1%; that’s something I thought most folks here agreed on. Much as I like reading Yves Smith, I think her personal animus towards the President is misplaced. All that we’re going to get for the foreseeable future (probably the rest of my life) is banksters in the WH.

  47. 47
    burnspbesq says:

    @RobinDC:

    Almost everything this settlement clears could have been prosecuted under those laws which exist in all 50 states.

    Assuming, arguendo,that that’s correct (I’d like to see you explain how you plan to prove every element of the offense beyond a reasonable doubt), give some thought to where the resources to prosecute all of the thousands of cases you believe to exist might come from.

    There is no fairy that magically delivers infinite resources to prosecutors. You seem to have missed that part.

  48. 48
    Tone in DC says:

    Lame ass trope?
    Do you know how our government actually works? Obama has proposed jobs bills. Many of them. The repukes won’t pass them.

    Obstructionism, asshole. Canyou see it?

  49. 49
    jonno says:

    Weak tea indeed. I’m still walkin’ away from my underwater condo and frankly everyone else in a similar situation should too.

  50. 50
    rob in dc says:

    @burnspbesq: This is where Federal Resources could come in handy to help cash strapped states make these legal arguments in court. And while proving every element beyond a reasonable doubt isn’t a certainty in every case it is indeed possible in many cases, the problem is our prosecutorial culture has decided for some reason to never take a case unless its a certainty. This is one sign of decay (of many) in our legal system, where prosecutors have become more concerned with their careers that justice, and even worse are so risk averse they no longer attempt to gamble on big cases, instead only going for small sure things. This issue predates Obama and I don’t hold him completely accountable for a weak prosecutorial culture or independence from the banks. It’s true that pretty much every public official sucks from that teat and none of them in the federal government is remotely interested in holding these people accountable.

    But I do hold Obama responsible for derailing any real attempts to hold people accountable in this deal by some real public servants, people like the Mass, Nevada and Delaware AGs, who were folded into this crapola thanks to sustained federal pressure to play ball. Pressure whose direction came up from on high, if not from Obama than his defacto number 2 Geithner.

    Also while holding Obama uniquely accountable for his cozy relationships with the banks would be unfair given the widespread prevalence of that kind of relationship, he remains the president of the United States, to whom more is given and more is expected. He is particularly in thrall to these interests and its galling to see and he should be called out for this, even if everyone else does it too.

  51. 51
    chris9059 says:

    “And our economy gets to foot the bill. Nice. Is this Obama’s fault? No. “
    Wrong! It was very clearly Obama’s decision to shift the costs of the bank’s malfeasance to homeowners and the general public by means of this settlement, the costs of which will come largely out MBS investors hides not the banks. The administration made no attempt to even seriously investigate the servicers actions and pushed for this settlement from day one.

    “Is this the best we can hope for right now? Unless the makeup of the House and Senate changes substantially …”

    Wrong again. The administration had the power to investigate and prosecute the banks regardless of the makeup of Congress. The President consciously chose to once again give the banksters a pass.

    ” …it’s not like bankrupting the banks and putting hundreds of thousands of bank employees who were not responsible for this disaster out of work is a viable solution either.”
    Wrong yet again. This is exactly the type of blackmail the banks have been using to escape culpability for the last 5 years and specifically to avoid nationalization when they were all de facto bankrupt. It is however a phony argument. There is nothing in the nature of bankruptcy that would require the elimination of large numbers of employees. Bankruptcy simply means that the banks would have new owners, whether that would be the government or the banks creditors. Arguably bankruptcy would lead to higher employment by the servicers. part of the reason the servicers have done such an atrocious job is that they have failed to hire adequate numbers of competent employees, no doubt because this would have cut into earnings and reduced executive compensation. Coming out of bankruptcy they might actually have to take on enough people to do the job properly.

  52. 52
    Flagrante says:

    We bailed out the banks, now it’s time for the banks to bail us out.

    How about this:

    Obama signs an executive order mandating that the rate for all principal residence home loans is reduced by 1/3. If your loan is 6% it becomes 4%. If your loan is 5% it becomes 3.33%. Across the board.

    Are you listening President Obama?

  53. 53
    Rawk Chawk says:

    @Tone in DC:

    Obama has proposed jobs bills. Many of them. The repukes won’t pass them.

    Those mean old, all powerful Repukes. Somehow they are ALWAYS in charge, whether in the minority or the majority.

  54. 54
    Rawk Chawk says:

    @Flagrante:

    Oh dear. This would be partisan and uncivil.

  55. 55

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