Mortgage Settlement Pretty Much a Done Deal as New York and California Join

News stories in American Banker, the Wall Street Journal, and now Huffington Post all indicate that New York and California will join the so-called mortgage settlement deal. From Loren Berlin at Huffington Post:

“It’s hard to see any state staying out of the deal if California is in,” said the source….

“Even if the final settlement number is $25 billion, it pales in comparison to the scope of the problem,” said Margery Golant, a Florida-based attorney who represents homeowners and formerly served as assistant general counsel at subprime mortgage giant Ocwen Financial. “If you do the math, that’s a few hundred million per state. That’s not enough to change anything.”

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  1. kravitz

    I agree with Dave Dayen on the idea that NY has the Administrative Order which has been tying lawyers in knots.

    But ES has not even suggested he’s ready to explain his position. Others are merely speculating.

    Meanwhile, there is also no update on whether banks still want to be in on a deal with what could be a few hidden attacks on them, even for only past behaviour.

  2. mmcgee

    Can we wait until the AG of NY, CA, NV, and FL actually announce their support of a published settlement before we jump on board with MSM trying to influence events?

    Sources familar with events could be anyone or have an agenda. Crap reporting.

  3. C

    Any new information on what the deal will be? All of the articles seemed to say that it is “done” but without any details or even proof.

    1. Richard

      It is a pyrrhic victory.

      Obama will try to portray this as good for America, but at the end of the day, all of the problems that NC has documented with mortgages and structured finance securities will still exist.

      The question I have is once the banks have a release from all liability, isn’t this the beginning of the end for the mortgage finance system?

      Why exactly will banks chase after borrowers who default on their mortgages? The release covers all the banks’ past sins, so why would they commit new ones?

      With a release from all liability, don’t banks have an incentive to exit the mortgage servicing business?

      1. YankeeFrank

        Well, the largest servicers are owned by the largest banks, and these banks still have many mortgages on their books, so they’ll definitely continue to service those. And since they are getting retroactive immunity for past sins, they will certainly continue those practices as the practices are done to pad the bottom line — foreclosures are way more profitable to servicers than modifying loans, so they will continue. They will also continue to commit forgery and other crimes because they know they won’t be prosecuted for it (they aren’t being punished now so why not continue — and please don’t tell me this settlement is a punishment — the amount of money being discussed — something like $5 billion in cash — is nothing, just a cost of doing business).

        No, this settlement, if done, is just the latest massive bailout of criminal banking institutions at the expense of the people. Rule of law is for the non-rich and small corporations.

        1. bhikshuni

          “Rule of law is for the non-rich and small corporations.”

          And for those who are profiteering the private prison system while disproportionarely incarcerating entire swaths of young black men!

        2. nonclassical

          expert testimony this week provides FACT substantial mortgage defaults to continue for another 15 QUARTERS at least…

      2. spacecabooie

        Seems logical, while in direct contrast to one of the primary reasons that’s being given for the settlement: to rejuvinate mortgage lending, presumably to be lead by the investment banks. A settlement can’t guard against the investment banks exiting the business, but the price to the banks should preemptively incorporate funds for this scenario. Are strictly commercial banks positioned and eager to pick up the slack ?

        On a different issue:

        “Not all of the aid would go to outright reduction of mortgage debt. Banks can also get credit for other types of relief like conducting short sales, in which a homeowner is allowed to sell a home for less than is owed and refinancing underwater homeowners at lower rates.”

        Why should a short sale, as the only offering available to a homeowner who would lose potentially hundreds of thousands of their downpayment, have to be considered by that homeowner as acceptable relief ?

    1. Rob

      Whoops, I’m going through your posts backwards today, Yves–you already mentioned this. Perhaps a better question: do you think it possible that Schneiderman’s stance on the MERS issue will effect this in any way?

  4. CB

    If these reports are correct and NY is in, can the people who wrote and called and emailed Eric Schneiderman get a refund on their good will?

  5. nowhereman

    I wrote him. This was my second. The first was to congratulate, the second, to express my disappointment.

    1. different clue

      Might people do what little thinking they can about what revenge might be possible against the probama-AGs in any further political careers they might try to pursue? Especially the string-us-along AGs like apparently Mr. Schneiderman?

      Meanwhile, people will just have to think about how to make their personal lives and meager wealth klepto-resistant
      within the Overall Kleptonomy Forcefield.

      1. Mike S.

        The public is willfully ignorant and practically incapable of critical thinking, not to mention historically illiterate.
        In MA they keep voting for Martha Coakley, even after she kept an innocent man in prison for events which never occured. (Does recovered memory-devil worship-baby rape ring a bell?)
        If they are willing to overlook/forgive that, they can overlook just about anything.

        1. LeonovaBalletRusse

          Mike S., not so fast. They may be ignorant of economics, but they are *against tyranny*, and can push a States Rights in Finance for Homeowners agenda, *sticking it to the Man* — the issue of Economic Justice can be made part of the equation. Check out the “Resistance” mood on You Tube, and join in the fun.

          Catch the drift at
          *FREE BEES” sing-a-long: “9/11’s a lie” (juttdisco on June 6, 2008).

          If you don’t hear from me, well … you know.

        2. different clue

          Things may look/feel hopeless, but we need to maintain a posture of realistic hope-in-theory and figure out what to do where action looks effective.

          The more personal economic pain and fear people fear, the more willing some of them might be to seek out information about how they got where they are and who put them there. Certainly the readership here is already looking and thinking even if that readership is a tiny fraction of the population for now.

      2. LeonovaBalletRusse

        This is where the States Rights *Resistance* comes in: READY to fight for the People’s Justice against Crooked Power Whores for Gain: *Sir! Yes Sir!*

  6. Bravo

    So…..rather than doing their jobs, the attorney generals predictably take the easy way out…..sell out their constituents and MBS investors for a few bucks and spin it as it they’ve done something to benefit middle America’s abused. They’ll pass out the money and there’ll be a lot of short term happy talk. Only later when it becomes apparent that the settlement barely put a dent in the problem, and in fact helped the banks minimize accountability for their actions, watch the strategic defaults on the 2nd liens begin.

    1. Stan Bastard

      There’s a revolvin’ door there too. They are all good friends, milking the Politboro, clinking wine glasses, switchin’ sides, plotting from massive castles. This subjective tripe is appalling, as if the AGs would actually dare to step in front of their paymasters. This is a Nat’l Security we’re talking about. The cattle must be processsed for meat.

    2. just me

      Why does that sound like water spilling into the next compartment, and the next, and the next, as the ship sinks? I sure wish I could see the blueprints of the whooooole ship. I get that the 1% will be the last guys shimmying up the flagpole, but still…

      Patching the top by holing the bottom is a fail in any ocean I know.

      1. Kevin Egan

        “And warmongering.” Indeed.

        KPFK was playing MLK’s speeches from 1968 today as part of their Black History Month fundraiser–they have an incredible archive.

        King was pointing out that we spent $386,000 to kill one Vietcong, and $56 per person in the war on poverty. That was just before he was assassinated–what a coincidence.

        1. LeonovaBalletRusse

          Kevin, this may make your day:

          “Charles Colson joined the chorus of Alito defenders with an unusual revision of civil rights history. Colson, who once burned a cross on the lawn of a black law partner in what he later described as a ‘prank, and who exploited resentment of forced school desegregation to win ethnic white votes for Richard Nixon, declared in a January 2006 radio commentary that Martin Luther King was ‘a great conservative. Were he alive today, I believe he would be in the vanguard of the pro-life movement and would be supporting Judge Alito.’ Colson’s logic, remarkable as it was, was actually part of a pre-meditated Christian-right effort to link alit to the legacy of King. This campaign culminated when Tony Perkins convened Justice Sunday III at a black church in inner-city Philadelphia.” [what’s up with Pennsylvania?]

          “The even featured a strange cast, beginning with Bishop Wellington Boone, an African American church leader and spokesman for the evangelical men’s group known as the Promise Keeper. Perkins had recruited Boone to lend his rally a splash of color; however, the bishop lost any credibility he might have enjoyed in the black community years before when he wrote, in his book, “Breaking Through,” ‘We need to boldly affirm Uncle Tom.’ …” [I guess he got his wish in 2008]

          “Herb Lusk, another conservative black clergyman close to Perkins, joined Boone on stage to shout down the liberal hosts of darkness who opposed Alito. … Lusk … was a former NFL tailback and lifelong Democrat who suddenly shifted his party allegiance to the GOP in 2002 when Republican Senator Rick SANTORUM guaranteeed him $900,000 in faith-based FEDERAL grants.” (pp. 146-147) from:
          “REPUBLICAN GOMORRAH: Inside the Movement That Shattered the Party” by Max Blumenthal (New York, Nation Books, 2009).

          Do the Uncle Toms on Parade make sense to you now? Do you wonder what the Vatican bankers have slipped SANTORUM on the sly, to press every Roman Catholic cause *full steam ahead* and call it: *Republican*?

          Oreobama is the *Democratic* Uncle Tom. “Politics Louisiana Style” — now where’s Huey, where’s Uncle Earl? I mean, Buddy Roemer didn’t make the cut.

  7. Kevin Egan

    “They never fail to screw us, do they?” So true.

    As the scorpion said to the frog, “I can’t help it, it’s my nature.”

    And they both drowned. The oligarchs will drown eventually too–they didn’t know how good they had it in the Great Moderation. Nothing moderate about a pitchfork.

    1. psychohistorian

      Pitchforks are a bit dated.

      We do have a lot of guns.

      I suggest we go for the global inherited rich and laugh them out of control of our society.

      1. LeonovaBalletRusse

        See YouTube for *Resistance* and the like. Economic Justice is the trump to change the game: Red-Blue Solidarity for Money and Country: Sir! Yes Sir!

  8. kravitz

    NYT – It’s Done.

    States Negotiate $25 Billion Deal for Homeowners

    “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.”

    “Officials will also be able to pursue any allegations of criminal wrongdoing. In addition, a lawsuit Mr. Schneiderman filed Friday against MERS, an electronic mortgage registry responsible for much of the robo-signing that has marred the foreclosure process nationwide, and three banks, Bank of America, JP Morgan Chase and Wells Fargo, will also go forward.”

  9. spacecabooie

    NYT: “In the agreement’s expected final form, the amnesty is mostly limited to the foreclosure process, like the eviction of homeowners after only a cursory examination of documents, a practice known as robo-signing.”

    This tells me that the [current, by definition] foreclosure process is amnestied, i.e., robo-signing, and cursory examination of documents can continue. Or sloppy writing; a process is a set of actions taken over time. “The” foreclosure process is occurring now. Amnestying “the previous” foreclosure process is what I hope this means. And yet that is all just the happy facade behind which the real bailout is taking place:

    NYT: “The prosecutors and regulators still have the right to investigate other elements that contributed to the housing bubble, like the assembly of risky mortgages into securities that were sold to investors and later soured, as well as insurance and tax fraud. “

    1. Brian

      Robosigning is still happening *today*.

      The same names we know and love from the last few years are still being used to file documents as late as 2 weeks ago.

      Nothing has changed, the game is over, we’re just watching the last few seconds tick from the clock…

      1. PL

        Yes it is and now it’s going to be even more blatant. Jeffrey Stephan and those of his ilk will sleep soundly from now on. It’s so wrong that the slimeballs are getting away with it.

    2. LucyLulu

      The immunity for wrongdoings related to the foreclosure process should only cover past acts. I would be very surprised if the waiver covers any wrongdoing moving forward. Another article I read recently (within last 24 hrs) stated there would be waivers for originations issues as well, although the attorneys general could pursue securitization issues, but there could be considerable overlap here. I wonder if this was a last minute change to the deal or inaccurate reporting.

      How many AG’s will pursue criminal investigations of these big banks? Is it a pipedream to hope that ANY of them will?

      1. LeonovaBalletRusse

        LucyLulu, it must be converted to a States Rights issue by Citizens prepped to play. See link in my post addressed to YVES below, re “State Prepare Brakes On Citizen-Detentin Option” by Bob Unruh.

        Do you have connections?

      2. hyperpolarizer

        Is there any hope that rocks will be overturned and crawling insects exposed, in a rash of civil suits, brought by private investors, claiming to have been defrauded in purchasing mortgage backed securities, whose title chain was essentially nonexistent?

    3. lambert strether

      It’s critical that homeowners remain powerless to resist. Everybody involved in making this deal should rot in the Ninth Circle of Hell (“The traitors are distinguished from the “merely” fraudulent in that their acts involve betraying a special relationship of some kind.” You know, like the public trust. Oh, what have I said? BWA-HA-HA-HA-HA!!!!)

      Also, too, thoroughly bipartisan. I can’t wait to hear The Droner orotate on this.

  10. Hugh

    This so reminds me of the healthcare debate. The fix was always in. The debate went on and on, there were moments where it looked like real reform just might be part of the deal, and then in the end it was the corporate sellout we all had feared and warned about from the beginning.

  11. Woodrow Wilson

    If you were a victim of a fraudulent bank foreclosure, you know, nothing like created out of thin air DocX documents, or LPS/HAMP induced fraud of some kind, and were ruined as a result, how the fuck are bankers/politicians not hanging from fucking lampposts?

    Welcome to your full blown Plutocracy, where the Rule of Law no longer exists for politicians and The Banking Cartel they enable.


  12. Doug Terpstra

    Yes, the fix was in some time ago, beginning with Miller playing tough guy, followed by Kamala Harris jumping back and forth across the fence with much fanfare, then Schneiderman with obvious political ambitions, and finally Beau Biden, son of the invisible veep. Between his script lines, Biden was clearly telegraphing his intent to capitulate to Dylan Ratigan the other day while voicing his overly-grave concern about MERS, a virtual non-entity. Yeah, like he’s going to challenge his daddy’s cabal and wreck his shot at national power and filthy lucre. Right. Uh-huh. You had us going there, Beau. Really.

    This is tragic but entirely predictable because gang banksters own the place. But like most parasitic predators ignorant of history, they are inevitably doomed to become victims of their own success. That will be a spectacular and terrible day of reckoning.

    In “Social Fractals and the Corruption of America” Charles Hugh Smith examines two key American myths: equal opportunity and equality under the law. As these myths are more clearly exposed as cruel lies of social control by an increasingly lawless oligarchy, then a tipping point approaches.

    “When the system enables fraud, collusion, misrepresentation of risk, moral hazard (the separation of risk and gain) and embezzlement, then it also rewards them. When breaking the rules in a systematic fashion garners huge rewards in wealth and power while playing by the rules dooms one to lower returns on the same investment of labor and capital, then the system itself is thoroughly, totally, completely, hopelessly corrupt.
    “ When the rule of law is routinely bypassed, flouted, negated or simply ignored without triggering uniformly applied consequences, then the system is thoroughly, totally, completely, hopelessly corrupt. Since America’s financial and political Elites have routinely bypassed, flouted, negated or simply ignored the laws governing mortgages, finance, insider trading, etc., actions that would lead to an average citizen’s arrest, indictment and routine conviction, then we must conclude that America itself is thoroughly, totally, completely, hopelessly corrupt. There is no other logical conclusion.”

      1. LeonovaBalletRusse

        YouTube: *Resistance* morphs: Red/Blue join for Economic Justice *NOW*.


  13. LeonovaBalletRusse

    YVES, cross above DEAL with link below for States Rights synergy ASAP:

    Blog by Bob UNRUH. Can State Patriots apply pressure via Statehouse to AG’s? It’s a photo-op on the quick. Quick tips for synergy via American Resistance on YouTube.

    Take your pick for QUICK. This is a Sizzling States Rights issue now, and Citizens are READY. They DO get it: Economic Justice. No more MrNiceGuy.

    1. LucyLulu


      I’ll be sending a copy to my state legislators………. although with the state currently having moved way into the red side of the aisle, I’m not particularly hopeful it will generate any interest.

      I bet if any states pass this legislation it will get Obama’s attention and he will try to legally challenge it through the courts as federal law trumping state law. Do you really think that people are ready to fight for something like this? My observations are that the public in general remains distracted by their more immediate concerns of day-to-day life, and dismiss political activists as extremists.

      1. LeonovaBalletRusse

        LucyLuly, this is the Quantum Moment of the Red-Blue Connect for Country.

        You are indeed a woman of action. You must have Scottish ancestry.

        (Clan Robertson)

  14. LeonovaBalletRusse

    YVES, connect Finance with:

    “Wikileaks Exposes 9/11 Conspirators!!!” (ankhsbreath on Dec 12, 2010); note *Marsh&Mac*; read fine print at 2:31/15:00 for JK of MFG.

    If you don’t hear from me, well … you know: “It is a far, far better …”

  15. psychohistorian

    How laughable is the settlement going to be?

    Just another brick in the wall.

    Are more paying attention? Do they like what they see?

    When rule of law becomes the Tiffany’s moral exception of the day to purchase like another bauble, we have truly come to the end of rational governance.

    Will none stand up to the machine? Evidently not……just wow.

    It has been quite evident for some years now that the legislative and executive branches of our government were totally corrupt but here we have a rude example of clear evidence of nationwide judicial corruption of our system as well.

    Stick a fork in it folks……toast.

  16. publius

    I wonder if the banks will get to count their HAMP reimbursements towards the settlement? I think there is about $20B left in HAMP funds to distribute, that should just about cover it.

  17. falun bong

    This entire thread comes under the category of “Subversive CrimeThought” which will classify us all as “terrorists”:

    I’m sure Black Bush and his disgusting little men are listening. Hello there, little men! You should be disgusted and ashamed of yourselves. The ghosts of Washington, Franklin, and especially Jefferson are watching you, too…your time will come.

  18. nightrider

    It is sad, but not surprising that when it comes down to the wire, nothing has changed. We ranted and huffed for weeks on this potential settlement just to see the destiny has been fulfilled. If any of us still thinks we are free, then I suggest we take the red pill.

      1. kravitz

        Seriously, we should hear from ES, MC, KH, CCM about what was their reasoning for joining, and what does it do for folks.

        Some feel the past is the past. Most of what this deal addresses. But from the line of demarcation, the game is very different.

        I am concerned that behaviour of the banks will not be tamed. If this is true, we have reason to actively denounce another term for the AGs and President. But if they can all prove and thoroughly explain their motivation and how this may actually benefit consumers – rather than reelection campaigns and slogans – perhaps they earn their keep.

  19. killben

    Classic government way of handling a crisis. Throw a big bone to the perpetuators and throw micro crumbs to the gullible public so that they do not see/talk about the BIG BONE. Hats off to Obama for pulling this off.

    Why are people so gullible? Why cannot they recognise the micro crumbs for what it is? Sad but true!

  20. albertchampion

    the citizenry hasn’t a clue.

    hell, they still think that saddam hussein was responsible for the events of 11/09/01.

  21. LeonovaBalletRusse

    COMEDY NIGHTCAP (rerun on YouTube):

    “CLOSE YOUR FACEBOOK ACCOUNT” (urbanshaman on Aug 9 2011).

    Hilarious! and so spot-on.

  22. Nancy

    The pit in my stomach that I am now feeling is one I felt often during the Bush administration and one I honestly thought I was leaving behind on Obama’s inauguration day. Although I have, to my dismay, felt it all too often since then, I have to say this time is the worst. Until now, I honestly (naively) thought there would be some resolution in the foreclosure crisis based in justice–that if we waited long enough the media would finally discover the story and be on the side of the people, and books like The Big Short and movies like Inside Job and blogs like this one (I so love you, Yves) would expose the depth and breadth of the corruption and filth the banksters have perpetrated on the people and markets of the world. The Republicans are insane. Another 4 1/2 years of this administration is insane. What’s left? What do we do now?

  23. Lafayette


    This thread gets into the nitty-gritty of the Foreclosure Industry, a sad chapter in our nation’s History of Finance in the US.

    But what about the future? some people are “working on that”. Of course, it is a complex subject — but well worth the time to get into that monumental task is an effort going on called the Ford–Levy Institute Project on Financial Instability and the Reregulation of Financial Institutions and Markets

    Any nation without a solid regulatory framework for principle market sectors, such as Finance but not only Finance, is not tripping through the daisies but over its feet. Which is precisely what Uncle Sam has done in the Toxic Waste Mess that provoked the Credit Mechanism Seizure in the Fall of 2008 – and then the Great Recession from which we have yet to see the light at the end of the tunnel.

    If we look at the history leading up to the Stock Market crash of 1929 and the Great Depression, it is remarkably similar to the Unbridled Capitalism that prevailed financially up to and including 2008.

    Paraphrasing American philosopher George Santayana:

    Those who refuse to learn from the mistakes of history are condemned to repeat them.

    1. LeonovaBalletRusse

      Lafayette, thanks for the link to “Ford-Levy Institute Project on Financial Instability and the Reregulation of Financial Institutions and Markets.”

      I didn’t see anything about the separation of powers, as it were. It looks like the public can still lose all, and be on the hook for “commercial” and “investment” bank losses, while the “Super Rich” play in the stratosphere. And won’t banks be *investing* in hedge funds, etc., or will there be a three-tiered system like a wedding cake? Maybe I don’t know how to read the *press release*.

      As has been shown, separation of powers is the REAL *insurance* against catastrophic loss to the People, when Kings take over. A lot of money is funding this two-year project, which appears to be very *academic*, aloof, and *closed-system*. PR for the masses is advised, with “friendly” access to information. I’ve observed that INET — — provides the friendliest, and freshest, presentations in *Economics* so far.

      Can we hear more about this? What does Yves say?

      1. Lafayette


        {As has been shown, separation of powers is the REAL *insurance* against catastrophic loss to the People, when Kings take over.}

        I’m not sure what your mean by “separation of power”.

        I know this for a fact, however: Common Law permits law to be made on the fly. That is, jurisprudence is made by the court itself with the law as a backdrop. Lawyers are always looking for “precedence” of a court ruling to help argue on behalf of their client.

        Civil Law is somewhat different. Everything is nailed down tight in Civil Law. The Foreclosure Process in France requires absolutely the approval of a judge. (Massive layoffs require the ruling of a court as well, since multiple labor contracts are involved.)

        The drawbacks are, however, also notable. Civil Law is rigid, whereas Common Law is more supple. It keeps up with times, which change, and therefore its interpretation can change as well. Whereas, in Civil Law judges wait for the legislature to change the law and content themselves with applying it.

        But even more important is something I call Cultural Value. The expediency of robo-signing foreclosures is simply impossible in Europe – with the exception of the UK. (Which is, btw, a Common Law country.) More importantly, it is just not conceivable that any creditor with default loans would opt for that mechanism. Because it is plainly illegal.

        But what if they do? Well, then you have – at least here in France – the DA’s coming down on them like a ton of bricks. In the US, it seems presently that the fad is to neuter Federal Oversight Agencies. This is perhaps a reaction to the Chamber of Commerce continually harping that regulations “stifled” business – without any definitive proof of such harm.

        Of course, well-enforced market oversight that might have noticed automatic foreclosures does indeed “harm business interests” – in preventing the creditor from disposing of the property by reselling it without permission from a court. And getting properties off their books as “bad debt” without delay, which always otherwise takes the luster off bottom-line results.

        And I am still waiting for the answer to my question as to why the Truth In Lending Act (TILA passed in 1968) has NOT ONCE been employed to address predatory lending.

        Not once. Never. Jamais! So, what the hell was its intent in the first place?

        MY POINT

        I’m perhaps simple minded. But it seems to me that a mortgage is a contract. A contract cannot be abrogated unilaterally. It takes an appearance in a court of law to end a contract.

        It seems to me simple logic that a law on the books should be enforced to its fullest extent by law authorities (aka DAs).

        Of course, if Jack ‘n Jill America do not understand that simple logic … sure enough, they care going to get screwed. Unless someone should blow the whistle on that illegal practice.

        Then the screw-er gets screwed and not the screw-ee.

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