Mortgage Settlement 'Whitewash': US Taxpayers Will Pay for Big Bank Settlement

[Better Believe It]

Mortgage Settlement 'Whitewash': US Taxpayers Will Pay for Big Bank Settlement
Mortgage Deal or Not, Abusive Foreclosures Continue
by Common Dreams staff
February 17, 2012

UPDATE: Reports in the Financial Times and elsewhere say that US taxpayers may be on the hook to bail out big banks -- again.

A report says U.S. taxpayers may end up on the losing side of the multi-billion-dollar housing settlement between banks and states. Former TARP Inspector General Neil Barofsky explains how we may be bailing out big banks again. "It was going to be punitive and make them pay for this remarkable misconduct that occurred. And now we're finding out that this so-called penalty is actually going to involve money flowing from the taxpayer into the banks. We're bailing them out again!"

When asked what this revealed about the "true intent" of the mortgage settlement, Barofsky replied:

Well I think what it does is it shows that the true intent of the settlement may differ from that which we were told during all the various press conferences. And instead of really, at the heart of this, being about accountability and punishment it seems like frankly a political whitewash during an election year. So it makes the Department of Justice look good. It makes the attorneys general look good. The banks are happy because they are going to get all the credit for this settlement while receiving money from the taxpayers. Really the only big losers are the taxpayers and, of course, the homeowners.

Read the full article at:

http://www.commondreams.org/headline/2012/02/17-0


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Are US taxpayers bailing out big banks again?
By Jill Schlesinger
CBS News
February 17, 2012

(MoneyWatch) U.S. taxpayers may be on the hook to bail out big banks -- again. The Financial Times is reporting that taxpayers will subsidize a large portion of the $25 billion mortgage settlement, which was broken down into two distinct pieces:

It's part two that's coming under scrutiny. A clause in the provisional agreement allows the banks to use the government's Home Affordable Modification Plan, or HAMP, to cover the principal reductions. Neil Barofsky, the former special inspector-general of the TARP, described the clause as "scandalous." Says Barofsky: "It turns the notion that this is about justice and accountability on its head."

A little refresher on the HAMP plan: Banks receive payments from the government when they negotiate with underwater homeowners to avoid default. The taxpayer reimbursement is used to help cover the banks' costs to write down principal balances and keep homeowners in their homes. Last month, the Treasury department announced it was tripling the incentive payments to owners of mortgages who agree to reduce loan balances. The timing of the settlement is therefore perfect.

As the FT notes, "by reducing those balances under HAMP, investors -- including the banks who agreed the settlement -- now will receive cash payments of up to 63 cents on the dollar for every dollar of loan principal forgiven. They also will receive additional funds when borrowers keep current on their restructured mortgages."

Read the full article at:

http://www.cbsnews.com/8301-500395_162-57380020/are-u.s-taxpayers-bailing-out-big-banks-again/

[rfranklin]

1. There's a big surprise!

Until there is something like the French Revolution nothing will change.

[bvar22]

2. DURec!

"US taxpayers may be on the hook to bail out big banks -- again."

Change "may" to "will".



Our system is very broken, and getting worse by the day.
This can't last much longer. The Working Class has nothing left to steal.
It seems as if our RICH overlords and their puppet politicians are grabbing as much loot as they can
before the whole thing falls completely apart.




You will know them by their WORKS,
not by their excuses.
[font size=5 color=green]Solidarity99![/font][font size=2 color=green]
--------------------------------------------------------------------------------------------------------------------------------[/center]

[midnight]

3. Bail out banks, but drug test the poor and close the school that their children have... Wall Street

is doing real well.

[jannyk]

4. k&r

[xchrom]

5. Du rec. Nt

[niyad]

6. yeah, like this is a big surprise to any of us

[woo me with science]

7. Of course.

Occupy, because change is not coming from inside this purchased system.

[Joe Shlabotnik]

8. predictable

There is no point in Negotiating anything with the banks. They will never pay out of their own pocket. Once and for all they need to be TOLD that they are paying and paying heavily, Investigated, and with face Jail time when found to be corrupt. There is no other way. Change is not going to come from within. They must be recognized as the virus they are, and purged forcefully from the system. A painful housecleaning is in order for all of their enablers too, and that is something that everyday citizens can help achieve.

[girl gone mad]

9. This is why we occupy.

[City Lights]

10. I fucking hate banks.

If I said what I'd like to see happen, I'd get PPR'd.