Just announced last Thursday was the settlement of the case against the big banks, and the results are disappointing to say the least!
In what was supposed to be the retribution for millions of homeowners across the country, who were foreclosed on/exploited by the unfair practices of lending institution, it is hard to see anything positive that came from the settlement procured on February 9th, 2012.
It is hard to gather my thoughts and organize them in a way that would allow me to effectively communicate them to you, as I am outraged, but alas I shall try…
Let us begin by discussing the players in this case: On behalf of the homeowners there was the Federal Government (aka the Obama Re-election committee), Attorney Generals from just about every states (including our very own Kamala Harris), and HUD (the juggernaut that is the Housing and Urban Development); for the opposition there was Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co., and Wells Fargo & Co. (who together service 55% of all loans).
One would think that with the team that homeowners had on their side (aka almost every Government official in every state) we would have been able to receive not only compensation for the unfair lending and foreclosures that took place over the past five years, but a little something additional in the form of punitive damages. Instead what we got was a $29 billion dollar settlement to pay mainly states and the government, with $1.5b being allocated to homeowners who were already foreclosed on (which will amount to less than $1000.00 per family that was foreclosed on). Additionally to get everyone who is currently suffering all excited they built in a weak promise to provide an additional $20 billion in aid to underwater homeowners (don’t jump for joy, keep reading for the criteria).
On the surface this sounds like a great success! I mean $26b that’s gotta really sting the banks right? Well, lets think about it this way: The banking industry, according to the FDIC reported profits in excess of $85 billion in 2010 alone!! That’s one year!!!
As for the additional $20 billion that is promised to be dispersed (which I doubt any of us will ever see) the government has left the specifics up to the banks, and they have already began talks of it going to homeowners that are current on their mortgage and want to refinance. I personally think this is a big “Screw You” to all homeowners who are desperate and truly cannot afford to pay their mortgages.
Oh, and one other thing: how does $20 billion stack up next to the $7 TRILLION DOLLARS (yes you are reading this correctly, it is a “T”) that home prices have fallen in the past 5 years; and moreover how is $20 billion going to even make a dent in the $750 billion dollar difference between peoples mortgages and the values of their homes??
The sad thing is that if you rewind back to when the shoe was on the other foot, and we as homeowners and tax payers bailed out the banks, we gave them about 20 times as much money as they are giving us.
It’s funny, when I was doing research for this article there was one thing that I really wanted to know: How Kamala Harris felt about this settlement? The reason being that she has been the strongest voice and advocate out there for not just CA homeowners, but across the nation. And even though I dug deep, I kept coming up with her “declining to comment”. After finishing my research I understand why: This settlement is a disappointment, and the touting of it by politicians is nothing more than churning out political fodder upon which campaigns are being built.
With layovers, criteria, convolution, and the ambiguity with which this suit has been settled on, I feel it is safe to say that no one will ever really benefit as a result. Even worse is when one thinks about the expense of all the politicians and attorneys we threw at this case over the past year.
I for one think that this whole case has been a waste of tax payer money.
After working with, and for, many different real estate firms, it became apparent to Harout that there was a major disconnect between what consumers needed/wanted and the service that was being provided to them. It was upon this realization that Harout founded and opened JohnHart Real Estate; and as the CEO/Principal Broker he has continued to break from the norm and redefine real estate with an insatiable appetite to give his clients the service and attention they deserve.
sounds like typical republican do nothing but be critical of those that are proactive and second guess any thing. there is not one positive or helpful thing that I read from this complaining article that will assist anyone.