Several states and major banks are said to be close to sealing a deal that would protect banks from civil suits over sketchy mortgage practices in exchange for $25 billion that would help underwater homeowners refinance their loans. The deal could help the weak housing market.
Reuters reports banks had been hesitant to follow through with the settlement because they wanted to be protected from liability for potential legal gaffes they made when originating loans, such as approving mortgages without verifying income. The protection, which the states now appear to be agreeing to, was originally only going to cover shortcuts the banks made in mortgage proceedings, including using robo-signers on foreclosures to evict homeowners.
States and the involved banks, which include Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, could close the deal by the end of the month.
US states near foreclosure deal with banks [Reuters]
Previously: Government May Hit Banks For $17 Billion Over Foreclosures
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This is what AG Biden is against. I like his analogy. You’re a house builder, you installed shoddy siding, get caught and are willing to fix that problem but want a sign off that they can’t be sued once you find the foundation and the roof are worse than the siding. That’s the kind of deal the banks want. They want off the hook if more shady practices pop up that have not yet been found.
Perfectly stated. Why should we let them get out of this?
Because they are to big to fail!!!
Because they own the government.
We shouldn’t let them get away with this, but they do own the people that pass the laws…
Looks like they’re gonna get what they want. :/
Seems pretty obvious to me… Big money is buying big protection.
Exactly
Government: It’d be a shame what kind of lawsuits could happen if you didn’t buy insurance
BigBanks: What’s this month’s take?
this wont work unless the money is given directly to the home owners. banks will just pocket it.
You’ll probably get a voucher for 1 free year of debit-free debit card use. Or something like that.
This is total crap. If the banks broke the law in providing mortgages to some people, they should be sued. People who took out mortgages that are now underwater but did so in good faith should not be bailed out, either.
If a big bank broke the law and is proven by a court to that effect, levy enough fines, damages etc to put them out of business.
I thought the United States’ policy was not to negotiate with terrorists!
I don’t think ‘terrorist’ is quite the word you’re looking for. Businesses like Big Bank remind me of Bond Villain corporations like SPECTRE.
Only without the ruthless efficiency. :C
If the banks ran SPECTRE, Bond would have come back from a mission to find a new family living in his villa. “No, Mr. Bond, I expect you to move.”
I don’t like this at all. If I am accountable for my actions then big companies and corporations should as well. You shouldn’t be able to purchase immunity to the crappy things you do to others. How are you supposed to learn from your mistakes?
BOHICA!! bend over – here it comes again.
1). Steal hundreds of billions of dollars
2). Pay 25 billion dollar “protection” fee to gubmnt
3). Rinse, lather, repeat
4). Profit?
Didn’t they get a few billion for this very reason already?
Tax dollars down the drain!
Well, they just keep on screwing us eh?
As your neighbour to the north, I have much sympathy for you. I am tired of hearing that the banks make the rules, and not the government. If I was with any of these banks, I would pull my money out. Definately not invest in them. When a company, no matter which one, does something that screws the people with no money, they should be heald accountable for it.
And Americans wonder why the crime rate is increasing. It is so because they see that you can get away with almost anything within this broken system. (Canada is just as broken.)
I believe that it is time for everyone who is not a greed driven, who wants a better society to put their foot down and say that maybe we should re-do ALL our laws, since they allow all of the things that we are supposed to be protected from. I mean if it gets any worse, people will eventually revolt against the government. I think bureaucrats don’t think that it will happen here, but I know about human psychology – one day it is just enough, and then there is civil war. I know that I have had enough of their greed and ability to manipulate the laws to give certain people or groups privilliges. I vote for the green party cuz it is the least corrupt, but still not that great.
I am a veteran, a former fire fighter, a “reformed Democrat”, a Southerner, a father and husband, a Catholic, and an employee. I support small businesses, my local banks and credit unions, my community, my heritage and my friends. I fix my own cars, my house, I cook and clean. I have installed tile, sheetrock, plumbing and done some general carpentry. I build my own PC’s and fix my neighbor’s.
I am an American. I love my country, but I am being pushed into hating the corporate/political system that has evolved. (And people wonder why conservatives don’t like the idea of the Constitution being viewed as a “Living Document”. Get it right once, and leave it alone.)
These are the bank that were “too big to fail” and now they want to be “too big to sue” as well.
Well I say they are too big to exist. Use our anti-trust laws, break the banks up and enforce the laws that protect the people.
Our political leaders need to understand, history repeats itself over and over again. Push the citizens to hard and they will push back, and historically they push back violently.
Do your job and PROTECT the PEOPLE, not the profits! Otherwise, you are the problem, not the solution.
They were too big to fail because the firewall which was Glass-Steagall was removed.
If these investment banks were taking crazy risks and being leveraged to the hilt, it would have been fine to let them fail, but because Glass-Steagall was repealed that means a failure of an investment bank (Chase, Citi, BofA, etc) means a failure of the depository bank (since IB and Deposit bank are the same thing effectively) where ordinary people’s savings would be wiped out completely.
Sure, bail the banks out once and then reinstate that firewall, so any future risk taking, the depositories would be safe from the investment banking. But that’s not what happened here.
We never fixed the problem so that if these IBs can take as much risk as they want and if their risks cause them to fail it doesn’t affect normal banking operations. We never fixed that systemic problem.
Are these the same banks that got bailout funds and government assistance specifically to help people refinance their loans, and hardly anyone at all could get any help, because they either made too little or too much or didn’t have a job or didn’t fill the paperwork out on time, etc…etc?
I’m sure THIS time it will be totally different.
Everytime someone brings this up, one of the same few people points out they paid those funds back the moment that the limitations from them became inconvenient. As though that is the point at all…
And they paid that money back by borrowing it from the Fed at 0%.
Nonsense. Every few weeks they trot out a new press release claiming they’re close to a settlement, when they’re not. While some AGs (specifically Tom Miller, Iowa’s AG) are keen to make a deal to save face here, a number in important states have pulled out (Schneiderman in NY, Biden in DE, Harris in CA) and others are likely to do the same when the final settlement terms are revealed to them, since any proposed settlement is undoubtedly going to be a big sop to the major banks who’ve committed all sorts of unlawful acts from fraudulent loan origination to robosigning to using MERS to avoid paying local mortgage transfer fees, to plain old document forgery.
Not gonna happen on any kind of large scale.
Why don’t this surprise me. These banks if they screwed up deserve to be sued. But these government entities have to protect the big banks that caused most of this mess.
The banks pay 0.2% back, get a stay out of jail card plus nobody can sue them. Great job state attorney generals.
Haven’t banks already shown they will not help people with troubled loans even when they are GIVEN the money by the government. What makes these states think the banks will help if the banks have to put fourth the money? Makes no sense.
So we gave them a bailout to help the homeowners, they keep it. We offer them protection from lawsuits because they did some seriously stupid and illegal things- so they’ll please please PLEASE help the homeowners?
Whaddaya want to bet they keep it?
How about we stop begging a thief to do the right thing? I don’t beg a bully to give me back my lunch money. I get as many fellow victims as possible and beat the shit out of him, then take all he’s got. Prosecute them.
So the banks already own the federal government and judiciary, now they’re targeting the states.
Life looks more and more like a Midnight Oil song…
Nice. Because last time money was set aside to help underwater homeowners, that worked out so well. /s
Wait, so the Big Banks are going to get even MORE money so they can continue to screw people over?
Amazing! I’m in the wrong business.
What is new they get away with Foreclosing on homes they don’t even have mortgages with.
Next they will want blanket immunity for anything they do that is Illegal. Government & the Banks are not our friends. Look the Government keeps giving them Money supposedly for a purpose but they don’t make it mandatory so the banks do as they want to with the money since no one will or can do anything to them. The politicians cry saying they aren’t doing as intended but in reality they are at fault.