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The Morning Grumpy – 2/9/2012

Filed under: Morning Grumpy

All the news and views fit to consume during your morning grumpy.


1. The NYTimes reports that 49 states (excluding Oklahoma) and five major mortgage servicers (Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial) have a greed to a $26MM settlement which allegedly holds the banks accountable for foreclosure abuses.

Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure.

Dave Dayen at FiredogLake has perhaps the best coverage of the settlement.

This settlement arises from multiple abuses found in the servicing of loans and the foreclosure process over the past several years. At the height of the housing bubble, banks sliced and diced mortgages and traded them with little regard for the rules following land recording or securitization to such a sloppy extent that they lost track of the true owner on potentially millions of homes. To cover up for this massive failure, banks and their servicing units have been found to have routinely forged, back-dated and fabricated documents at county recorder offices and state courts across the country.

Furthermore, they employed “robo-signers,” who signed hundreds of thousands (if not millions) of documents and affidavits without any knowledge of the underlying mortgages. In addition, investigations uncovered massive servicing abuses, including illegal fees charged to borrowers, putting borrowers into foreclosure at the same time as they were working out loan modifications, failing to honor previous settlements where promises were made on modifications, and countless other errors that maximized servicer profits and gouged homeowners.

There are also cases of wrongful foreclosures where homeowners have been turned out of their homes without just cause, and servicer-driven foreclosures, where servicers illegally added late fees and applied payments inaccurately, pushing the homeowner into foreclosure. This is but a smattering of the examples of foreclosure fraud and servicer abuse found in a series of interlocking investigations, court depositions, reviews of documents in registers of deeds offices, and homeowner testimonials.

As The Huffington Post reports, little of this settlement goes directly to borrowers and homeowners.

The total for the top five servicers is now touted as $26 billion (annoyingly, the FT is calling it “nearly $40 billion”), but of that, roughly $17 billion is credits for principal modifications, which as we pointed out earlier, can and almost assuredly will come largely from mortgages owned by investors. $3 billion is for refis, and only $5 billion will be in the form of hard cash payments, including $1500 to $2000 per borrower foreclosed on between September 2008 and December 2011.

More analysis will be forthcoming as journalists scrub the details of the agreement. I’d suggest following Dayen at FiredogLake and the Wall Street Journal for thorough coverage.

2. The Republican Party in America 2012!

Racist stereotypes and fear. The only thing that ad (which ran during the Super Bowl on stations in Michigan) is missing is the woman threatening to go “pee pee in your coke”. Fucking hell.

3. Rick Santorum, big fan of the Crusades.

“The idea that the Crusades and the fight of Christendom against Islam is somehow an aggression on our part is absolutely anti-historical,” former Sen. Rick Santorum (R-PA) told a South Carolina audience yesterday. “And that is what the perception is by the American left who hates Christendom.”

I’m glad someone is standing up for the slaughter of millions in the name of religion! Finally!

4. The incredible tone-deafness of the catholic church rears it’s ugly head, yet again, in an interview with Connecticut Magazine. Cardinal Edward Egan, has rescinded his apology to parishioners regarding the church’s role in the thousands of sexual abuse cases in NY, MA, CT and other states.

CT Magazine:  In 2002, you wrote a letter to parishioners in which you said, “If in hindsight we discover that mistakes may have been made as regards prompt removal of priests and assistance to victims, I am deeply sorry.”

EGAN: First of all, I should never have said that. I did say if we did anything wrong, I’m sorry, but I don’t think we did anything wrong.

Well, alrighty then.

Fact Of the Day: On a 1995 visit to Washington, the then-president of Russia Boris Yeltsin was found on Pennsylvania Avenue, drunk, in his underwear and trying to hail a cab in order to find pizza.

Quote Of The Day: “Where free unions and collective bargaining are forbidden, freedom is lost.” ~ Ronald Reagan

Looney Tune Of The Day: Friz Freleng’s masterpiece “Three Little Bops” – In my opinion, the greatest Looney Tune ever created.

Song Of The Day: “Madame George” – Van Morrison

Follow me on Twitter: @ChrisSmithAV

Email me links, tips, story ideas: chrissmithbuffalo[@]

  • Cluade

    you know what I put 20% down onmy house and paid the mort every month, still do, and now this will bail out a-holes who wanted these loans, give it a rest on this one, its not just banks, its the a-holes who took the money

    • You’re oversimplifying this. There was documented fraud and abuse by the banks, seriously, you should look into it.

  • Cluade

    no i am not over simplifying it, nor more than you, don’t assume everyone who disagrees with you is not “in the know” like you, I know this very well – I was not in this business but saw what was going on, don’t act ike everyone was a babe in the woods, they (the buyers) were buying houses way beyond their means and didn’t want to know too much, just how to get the loan.
    And these were not all lower income people, a lot of middle and upper end folks saw they could get into homes that should have been beyond their incomes, or second homes that they had no real means to purchase.

    My point is, those of us who played by the rules are the ones who are hurt most by this as now credit is very hard to get, even if you have 20% down and a real income, and where do you think all this loss is passed on to? It just disappears by writing down a loan? No, it is made up in other ways, taxes must be raised if fed money goes to it, fees go up if the banks take the hit. Or maybe you are one of these poeple who think private industry just has this money laying around and it dosen’t end up back on the consumers.

    • “don’t assume everyone who disagrees with you is not ‘in the know’ like you”

      It’s hard not to when you’re ignoring the content in the links and the grounds for the settlement in order to make a point about poor people ripping off helpless banks. This settlement is about the purposeful manipulation of the mortgage process by banks based upon tens of thousands of pieces of evidence. This very specifically is targeted at punishing BANKS for their role in the mortgage crisis. If you think the banks are absent responsibility for their documented fraudulent activities, well, you’re living in a world of denial, pal.

  • Cluade

    Also, the “fraud” you speak of never applied to foreclosing on people who are paying/keeping up with their mortgages, it goes to the practice of “robo-signing” on huge backloads of foreclosure actions, and that is about how the foreclosures were carried out, not that the houses in question should have been foreclosed on, becuase they should be foreclosed on. Dumbass.

    CNBC qoute:
    “Nor is the government arguing that the banks profited from these foreclosures. The basis of offering the benefit to the 1.3 percent winners in this lottery is that the government is unhappy about the way the foreclosures took place.”

  • ^^ Wow.

  • Bbill

    The bankstas are clearly the real victims here.

  • Jim

    And all the suckers who paid their mortgages in a timely manner. They get to pay for theirs and get taxed to pay for the idiots and the banksters. What a country!

  • Cluade

    Jim I agree, am not trying to protect or deny the banks went bananas to make a ton of money and got a get out of jail free card from the feds(all of us), the real losers here are the people who did, and continue, to do things right.
    Like Isaid stupid me I pay my mortgage in full and on time, and I get no break for doing it. But if I didn’t I could get in on this program, which frankly as nothing to do directly with robo-signing!

  • We don’t at all live an a culture that glorifies and enables people to accumulate material goods beyond their needs or ability, not at all.

    Oh, and everone who succumbs to that ubiquitous, incessant, unavoidable message is an asshole.

    Got it.

  • Claude

    Yep a-holes not victims of their own stupidity and greed, but a holes. And these a holes are costing the rest of us a fortune in so many ways it is hard to conceive.

  • Mike Chmiel

    Shorter Claude – it is a lot more fun to blame poor people than to assign blame to the wealthy corporate bankers whose ass I enjoy kissing on a daily basis.

    Yeah – we would all be rich if only those pesky poor people would stop gaming the system. The Fox News Generation, folks.

  • Jesse

    Too bad our regulations just weren’t intrusive enough. When regulation fails… add more!

    Politicians, lawyers, banksters. Boy, humanity makes me real proud sometimes.

  • Ian

    Can we agree that both lenders and the people who took out mortgages they knowingly couldn’t afford are both at fault here?

    Also, thanks for posting “The Three Bops”…love the cartoon shorts from that era. I haven’t seen that one in years. If you want funny, check out “Car of Tomorrow” and “Magical Maestro” by Tex Avery.

  • Claude

    Hey mike you want to play the rich Corp poor person card this is the wrong game, a lot of these bad loans are with middle class and upper class people buying way beyond their means, or go to florida and look at the inventory of second homes,
    but you just keep thinking it is that simple probably makes your day a lot easier

  • Mike Chmiel

    “but you just keep thinking it is that simple probably makes your day a lot easier”

    And that is where you are dead wrong – the simple explanation is the one that you cling to because it confirms your worldview that you are superior to all poor people.

    If you want a complex explanation about the mortgage crisis, you’re in for a lot of reading about things like credit default swaps and collateralized debt obligations. About pervasive mortgage fraud. How about these banks and lending institutions that advised people that they could afford excessive mortgages?

    God, I am tired of middle class America letting Wall Street off the hook.

  • Claude

    Read slot sorkins book and the big hook, etc way ahead of you, but you are only looking at the fire these are the logs, and logs are made up. Of the loans taken by people williingly, read my posts above I am not letting the banks off the hook but you need the logs to make the fire, and those logs were people doing really stupid fucking things they could not afford to do based on really fucking stupid assumptions like real estate never losses value.

    And chirs look at what is even more ridiculous is this settlement will do nothing to effect the people who lost their homes, it will go to try save the people who are in over their heads, while I pay my mortgage like an idiot, you see this as a fair response? A fair response would be to lower everyones loans.

    God you people are so myopic about this big Corp crap. But like it said it makes everything just so tiddy and we can have a faceless bogey man to blame instead of our selves.

    Go sit in the square and smoke some weed and piss and moan while the world passes you by.

  • Mike Chmiel

    And you keep thinking that if you kiss enough corporate ass that they may throw you a crumb one day.