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Obama Is on the Brink of a Mortgage Settlement With the Big Banks—and Progressives Are Furious
Critics of Mortgage Deal Press Obama, State AGs to Reject Big Bank Proposal
Progressives "Furious" at Emerging Details of Mortgage Deal
By Common Dreams staff
January 23, 2012
A long anticipated draft settlement between the nation's largest private mortgage lenders and US states has been announced, but it doesn't look good for industry critics who hoped the banking giants — Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial —would suffer full investigations and payouts equal to the damage they caused to homeowners and the overall economy. The deal would still have to be accepted by the states.
Earlier today the Associated Press reported:
The nation's five largest mortgage lenders have agreed to overhaul their industry after deceptive foreclosure practices drove homeowners out of their homes, government officials said Monday.
Those who lost their homes to foreclosure are unlikely to get their homes back or benefit much financially from the settlement, which could be as high as $25 billion. About 750,000 Americans — about half of the households who might be eligible for assistance under the deal — will likely receive checks for about $1,800.
http://www.commondreams.org/headline/2012/01/23-2
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Obama Is on the Brink of a Settlement With the Big Banks—and Progressives Are Furious
George Zornickon
January 23, 2012
For months, a massive federal settlement with big Wall Street banks over their role in the mortgage crisis has been in the offing. The rumored details have always given progressives heartburn: civil immunity, no investigations, inadequate help for homeowners and a small penalty for the banks. Now, on the eve President Obama’s State of the Union address—in which he plans to further advance a populist message against big money and income inequality—the deal may be here, and it’s every bit as ugly as progressives feared.
The Associated Press reports that a proposed deal could be announced within weeks. Five banks—Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial (formerly GMAC)—would pay the federal government $25 billion. About $17 billion would be used to reduce the principal that some struggling homeowners owe, $5 billion more would be used for future federal and state programs and $3 billion would be used to help homeowners refinance at 5.25 percent. Civil immunity would be granted to the banks for any role in foreclosure fraud, and there would be no investigations.
Senator Sherrod Brown of Ohio characterized the rumored deal as “not much more than a slap on the wrist,” and added that while banks were always know to be too big to fail, they were now apparently “too big to jail.”
“When laws are broken there need to be full investigations,” Brown said. “Wall Street should not get another bailout.”
Read the full article at:
http://www.thenation.com/blog/165806/obama-brink-settlement-big-banks-and-progressives-are-furious
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FOR IMMEDIATE RELEASE
January 23, 2012
Campaign for America’s Future Urges President: Stand Against a Sweetheart Deal With the Big Banks
WASHINGTON - January 23 - Robert Borosage, co-director of the Campaign for America’s Future, is urging the Obama administration to investigate the big banks on mortgage related fraud before endorsing a settlement with them. With reports circulating of a pending state attorneys general settlement with the big banks that would immunize them from prosecution and civil suit in exchange for $25 billion, largely for principal reduction for underwater homeowners, the Campaign For America’s Future has joined in a broad coalition to oppose any sweetheart deal.
Statement from Robert L. Borosage, co-director of the Campaign for America’s Future:
“Americans from across the political spectrum are angry that the Wall Street banks blew up the economy and got bailed out, while home owners and taxpayers were stuck with the bill.
“This is a fundamental question of justice and democracy. The law is respected only if it is enforced. Cutting a settlement with the banks before there is an investigation violates our basic sense of justice. No one who robbed a bank would be offered immunity, a modest fine and no admission of guilt – before there was an investigation into who stole the money and how much they took.
“And there is a fundamental question of whether the democracy can hold the wealthiest few accountable. Americans are increasingly cynical about politicians, believing that Wall Street can buy and sell Washington. This is destructive to our democracy. The President’s campaign will highlight his commitment to fair rules and a fair shot for every American. A sweetheart deal with the banks would be a glaring contradiction to that theme. Any deal, enforced over the objections of the most independent Attorneys General, like New York’s Eric Schneiderman, will fail that test.
“What the people want is clear: Investigation before immunity. Penalize the perpetrators, not their victims. Any settlement must have sufficient scope to deal with the scale of the problem. There is an estimated $700 billion of negative equity in underwater homes. While 1 million homeowners have been helped by efforts to save homeowners, 10.7 million homeowners are underwater and that does not count people who have already suffered foreclosure. The top six banks paid bonuses worth $140 billion last year alone, or $420 billion over the last three years. They hold assets of $9.5 trillion. The rumored settlement of $25 billion is barely a slap on the wrist.
“It is vital to this country that the banks are made accountable. It is vital that they do not see the law as simply a minor price of doing profitable business, a speed bump on the way to their bonuses.
“With Occupy Wall Street inspiring activists and with citizens across the country being asked to pay to clean up the mess the banks created in the economy, every state Attorney General and the Administration should understand that any deal will receive widespread public scrutiny. Any settlement must be able to satisfy the standards of justice and fairness. What is now on the table does not come close.
“I want to laud Sen. Sherrod Brown (D-Ohio) and Rep. Brad Miller (D-N.C.) for defending the most vulnerable consumers and for advocating for better solutions to the foreclosure crisis.”
Act now: Stand Against a Sweetheart Deal for the Banks!
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The Campaign for America’s Future is the strategy center for the progressive movement. Our goal is to forge the enduring progressive majority needed to realize the America of shared prosperity and equal opportunity that our country was meant to be.
http://www.ourfuture.org/news-release/2012010423/campaign-america-s-future-urges-president-stand-against-sweetheart-deal-big-
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FOR IMMEDIATE RELEASE
January 23, 2012
Statement by AFL-CIO President Richard L. Trumka on Possible Bank Mortgage and Foreclosure Fraud Settlement
WASHINGTON - January 23 - We need to hold banks accountable for the fraudulent practices that brought about the worst economic crisis since the Depression. State Attorneys General have been investigating bank fraud, and these critical investigations must not be undermined by a premature and inadequate settlement. We call on the administration to reject any deal that insulates banks from full responsibility.
It is critical that the Department of Justice lead a comprehensive investigation together with the state Attorneys General to prevent banks from engaging in future unlawful and deceptive practices that could exploit homeowners and put the economy further at risk.
We commend state Attorneys General like New York's Eric Schneiderman and Delaware's Beau Biden for their leadership and courage in calling for a real investigation and relief on a scale that helps the millions of homeowners who face a new wave of foreclosures.
The economy is currently weighed down by $750 billion in negative home equity, so relief on a massive scale is needed to lift home values and stimulate the economy by increasing consumer demand. A comprehensive settlement must force banks to write down underwater mortgages. A sum significantly larger than the rumored $25 billion is needed for the economy to grow and create jobs.
Specifically, the administration must stand strong against the big banks and insist on:
1) A full and thorough investigation into problems tied to the residential mortgage-backed securities (RMBS) market, and
2) A guaranteed minimum amount of money set aside for reducing the mortgage principal of "underwater" homeowners in key states impacted by the foreclosure crisis.
This is an opportunity for the administration to demonstrate leadership and show that it has the political will to do what's right for homeowners and right for our economy.
.
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The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is a voluntary federation of 56 national and international labor unions. The AFL-CIO union movement represents 10.5 million members, including 2 million members in Working America, its new community affiliate. We are teachers and truck drivers, musicians and miners, firefighters and farm workers, bakers and bottlers, engineers and editors, pilots and public employees, doctors and nurses, painters and laborers-and more.
http://www.commondreams.org/newswire/2012/01/23-8
58 replies
= new reply since forum marked as read
= new reply since forum marked as read
and easy to dance to....
That was stunningly superficial. Now...care to add some substance, in your own words?
IOW....reinforce your support of the articles the same way you demand substantive rebuttal.
You posted them, so you must have enough understanding to provide some manner of supportive commentary?
Oh dear... You even cut and paste your own responses?
http://www.democraticunderground.com/1002210116#post38
http://www.democraticunderground.com/1002210122
I haven't labeled myself yet, but I'm not furious. I'm pretty furious at the weak rethug lineup...
I haven't labeled myself yet, but I'm not furious. I'm pretty furious at the weak rethug lineup...
knowing that the 1% will be protected at all costs and destroying the economy via fucking the 99% will go virtually unpunished under both Democratic & Republican regimes. Yeah, some low-level punks will get tossed in the clink, but they're always expendable. Just as long as the elite go essentially unscathed, it's all good. 
Dear XXXXXXXXXXXX
Sometime very soon, President Obama has a decision to make. The consequences will impact the lives of millions of underwater homeowners and the future of our economy.
Settlement talks with the Big Banks that caused our mortgage crisis are ongoing. And the Obama administration is a big part of those talks. The President and administration officials can either let Big Banks and mortgage fraudsters off the hook with a slap on the wrist—or push for real accountability.
Sign our petition to President Obama urging him to side with working families.
Big Banks and mortgage fraudsters have a lot to answer for. They abused and defrauded consumers—and their greed and recklessness caused a devastating financial crisis. There are 7.5 million homes that have entered the foreclosure process, with another 4.8 million homeowners at risk.
Now, it’s time to set things right. The Obama administration should reject any weak settlement that amounts to a slap on the wrist for bankers and fraudsters and push for a robust settlement that provides relief to millions of underwater homeowners.
Tell President Obama: It’s critical that the Department of Justice lead a comprehensive investigation. We need you to fight to hold Big Banks and mortgage fraudsters accountable and keep millions of Americans in their homes.
State Attorneys General from coast to coast have been investigating bank fraud. And a group of them—including New York’s Eric Schneiderman and Delaware's Beau Biden—have stood up for working families by working for a robust settlement that provides real accountability and has the potential to keep millions of underwater Americans in their homes.
This work must not be undermined by a premature and inadequate settlement. Wrongdoing was committed on a massive scale. That’s why it’s time for the Obama administration and the Justice Department to lead a full investigation—and work with the bravest state Attorneys General like Schneiderman and Biden to fight for real accountability and a tough settlement.
Tell President Obama: We need a settlement strong enough to ensure that this never happens again.
A key to getting our economy moving again is providing relief to underwater homeowners and making sure this kind of abuse never happens again. President Obama has to get this right. Let’s help him do the right thing.
Thank you for all the work you do.
In Solidarity,
Richard L. Trumka
President, AFL-CIO
to back off? In making endless excuses for the President, his supporters who choose to forgive EVERYTHING have to ignore a whole hell of a lot!
So what about pressuring states to back off investigations & prosecutions? Here are two examples:
From the NY Times:
Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.
In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.
Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.
But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general’s participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation.
In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.
Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.
But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general’s participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation.
And in a separate NY Times article:
The desire to know precisely what happened during that give-a-mortgage-to-anyone-who-breathes, securitize-this frenzy has historical antecedents. In the Great Depression, the United States Senate hired another New York lawyer, Ferdinand Pecora, to write the report on its investigation of that collapse.
Mr. Pecora found more questions than answers, and insisted on more subpoenas, more forensic investigators and more brokers testifying under oath. Like a man reaching into a barrel of dead fish, he found a great stink. Not least, he discovered that National City (the lineal ancestor of the same misbehaving Citigroup) had sold flawed investments and that its president engaged in something close to tax evasion.
Seventy-eight years later, the Obama administration has Shaun Donovan, secretary of housing and urban development; the economic adviser Gene Sperling; and Attorney General Eric H. Holder Jr. dialing liberals, activists and bloggers, urging them to pressure the rebellious attorneys general to forgo emotionally satisfying inquiries and take the deal.
Mr. Pecora found more questions than answers, and insisted on more subpoenas, more forensic investigators and more brokers testifying under oath. Like a man reaching into a barrel of dead fish, he found a great stink. Not least, he discovered that National City (the lineal ancestor of the same misbehaving Citigroup) had sold flawed investments and that its president engaged in something close to tax evasion.
Seventy-eight years later, the Obama administration has Shaun Donovan, secretary of housing and urban development; the economic adviser Gene Sperling; and Attorney General Eric H. Holder Jr. dialing liberals, activists and bloggers, urging them to pressure the rebellious attorneys general to forgo emotionally satisfying inquiries and take the deal.
-- how do you ignore this?
Sid
