For more than a year, home foreclosures slowed as banks and mortgage companies dickered with the government on how taxpayer relief could bail out a small percentage of those who purchased homes they could not afford. The deal struck and announced by Obama yesterday, is expected to bring about a flurry of home seizures! Oh joy. $25 BILLION of taxpayer responsibility to do something for 8% of homeowners now in trouble, many who didn’t put a bloody cent down on the house. If your neighbor has been caught in the foreclosure slow-down, and particularly if their loan is from Fannie Mae or Freddie Mac, then they are likely to be foreclosed on soon because they are not covered in this bailout. You will lose a portion of your home equity. The deal is being called a “landmark settlement.” Don’t miss the update below.
We had fraud by our government who forced irresponsible loans on lenders, forcing them to accept loan applicants with no credit or poor credit. The Government forced lenders to make these risky loans, yet Obama told us yesterday the buyers were “tricked” into the mortgages.
Then…we had the mortgage fraud, as thousands of applications rolled in. “Victims” were victimized again by “electronic notarization” of documents, known as “Robo signing.” Some 750,000 families will receive payments of $1500 to $2000 for that victimization.
Compensation [for robo-signing] will be offered to people who lost their homes between Jan. 1, 2008, and Dec. 31, 2011. Those who want more than $1,500 apiece will have to sue for it. The settlement leaves open that possibility. Source Forbes
It is only appropriate, and so ironic, that a politically motivated settlement whose purpose is to squash any claims of pervasive defective document fraud (and contract law but just ask GM bondholders about that – it’s hardly news) is itself found to be… defective. American Banker reports that the reason why the terms of the so-called historic (just ask the Teleprompter in Chief) foreclosure settlement deal are not public yet, is “because a fully authorized, legally binding deal has not been inked yet.” Wait, so America’s cohort of AGs just all, pardon the pun, robosigned a piece of paper that does not exist? What next: there is a different Linda Green signature on every page of this yet to be produced document making a complete mockery of the rule of law?
Oh and anyone who had doubts that the settlement, which incidentally is paid for by you, dear taxpayers, in the form of bank bailout cash, of which the banks still owe over $10 billion in some capacity, was merely a political ploy to get taxpayers to fund Obama’s reelection campaign by subsidizing squatters with $2,000 per vote in the presidential race come November, using banks as intermediaries to make the administration seem oh so powerful and daring to take on the banks, who in fact are the only ones benefiting from this farce, by holding a gun to the head of the hold out AGs forcing them to sign a piece of paper that does not even exist, this should put all those doubts to rest.
American Banker has the story
The agreement will direct $17 billion to writing down debt to buffer about 1 million homeowners from foreclosure through mortgage forgiveness, forbearance or loan modification programs, according to Housing and Urban Development Secretary Shaun Donovan. About 750,000 borrowers may get direct payments of as much as $2,000 to compensate them for servicing errors…
Principal reductions and other loan modifications will be accessible to a small universe of borrowers because the deal doesn’t include loans owned or guaranteed by Fannie Mae (FNMA), Freddie Mac or Ginnie Mae, which pools and sells Federal Housing Administration loans. The five banks included in the settlement control or own 7.3 percent of all outstanding single-family mortgages, according to Inside Mortgage Finance.
“The primary beneficiaries of any principal reductions, loan modifications or refinancings are really a universe that excludes 92 percent of mortgage borrowers,” said Guy Cecala, publisher of the newsletter.
Relief from taxpayers can take up to three years and it may take awhile before you know if you qualify. Administrative costs of this mess (government workers hired, what the lawyers make, etc. has not been revealed). With 92% of those needing relief not included in this $25 BILLION bailout, foreclosures are expected to surge.
UPDATE 4:30 pm CDT: Eric Bolling on The Five says the housing mess is $5 TRILLION deep, with mortgages underwater adding up to $750 BILLION.