The Obama Mortgage Settlement is Just Another Bank Bailout in Disguise

As if it’s not bad enough that big banks are taking homes from people that already paid for them, now many states are cutting a deal to help keep the banks safe from losing everything in lawsuits filed by the people they ripped off with their “robo-signing”.

David Wallechinsky
Monday, February 13, 2012

Announced with much fanfare by the Obama administration, the national foreclosure settlement agreement could wind up being a great deal for the banks involved. They will be liable for only a miniscule percentage of the damage they’ve done and the bankers themselves will escape criminal charges.
Under the terms of the settlement, Wells Fargo, Citibank, Ally/GMAC, JPMorgan Chase and Bank of America will pay $26 billion to resolve cases involving foreclosure fraud: robo-signings, forgery, adding illegal fees and other servicing transgressions that adversely impacted homeowners across the country.
stop foreclosure fraudCritics of the settlement point to where the $26 billion will be going. According to David Dayen at Firedoglake, “$5 billion will go as a hard cash penalty to the states, which can use them for legal aid services, foreclosure mitigation programs, and ongoing fraud investigations in other areas.” Another $3 billion with be used to refinance the mortgages of a minority of the 11 million borrowers who owe more than the value of their home (a.k.a. underwater loans). Some of this money will go to people who were wrongfully foreclosed upon. Up to 750,000 borrowers will be eligible for a check of $1,800-$2,000, which is, in the words of Dayen, “the equivalent of saying to them, ‘sorry we stole your home, here’s two month’s rent.’” Since the average loan is about $180,000, lucky underwater homeowner with get 1% of what they owe.
It’s important that we, the people, stand up against the deal these banks are getting. I encourage you to sign this petition and tell your Attorney General to hold the big banks accountable for mortgage fraud.
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