Homeowner Bailout?

[Gregg]

I think it's called smart assisidity, not assyness.

Urban Dictionary:


smart-assyness
The act of being an ass, but with an undertone of mirth

[Judge Jude]

Halloween costumes from last year, but wow.

http://gawker.com/5854540/top-foreclosure-firm-threw-homeless+themed-halloween-bash?utm_medium=referral&utm_source=pulsenews

[Lucky]

Here's a video that popped up at that site:

http://gawker.com/5854674/just-how-drunk-is-rick-perry-in-this-video

He really seems a lot different here from his usual personality. It also seems to be source for that Tim Geithner joke.

[revo]

GITH's wish comes true:

WASHINGTON (MarketWatch) — After more than a year of negotiations, the biggest banks, states and federal authorities on Thursday announced the largest housing settlement ever -- for more than $26 billion -- over foreclosure practices that is expected to offer relief to more than one million U.S. homeowners.

Of the $26 billion in the deal with the five banks, $17 billion must be spent by the banks to assist struggling homeowners. Of that amount, 60% must be employed to reduce the amount owed by troubled borrowers, known as principle reduction. The amount must be spent within three years, or banks will need to make cash payments to regulators.

A government official said he believes the vast majority of principal write-downs will take place on loans sitting on bank portfolios because they will receive the largest credit against their obligations under the settlement to do so.

The banks would need to meet certain minimum targets, in terms of borrowers assisted, and a bank will receive a much greater credit for reducing principle on a loan on their portfolio, as opposed to a loan serviced for others, according to officials who drafted the deal.

http://www.marketwatch.com/story/banks-states-reach-26-billion-settlement-2012-02-09

[Don Quixote]

Of that amount, 60% must be employed to reduce the amount owed by troubled borrowers, known as principle reduction.
http://www.marketwatch.com/story/ban...ent-2012-02-09

How can the banks reduce "principle" when it's well known that bankers have no principles?

(Someone at MarketWatch either doesn't know their way around homonyms or committed a Freudian slip)

[Erik]

I think I see more incorrect uses of principal/principle than correct uses, by professionals and amateurs.

[GwynnInTheHall]

How can the banks reduce "principle" when it's well known that bankers have no principles?

(Someone at MarketWatch either doesn't know their way around homonyms or committed a Freudian slip)

I thought you were in the Theatre?

[Judge Jude]

http://www.huffingtonpost.com/yves-smith/mortgage-settlement_b_1264806.html?ref=business&ir=Business

Please tell me this one is all wet - aggregator Huffington Post is spotty at best, but they have some decent people on the big stuff and this article links to some other analysis.

Among the lowlights:

"Here are the top twelve reasons why this deal stinks:

1. We've now set a price for forgeries and fabricating documents. It's $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust............

2. That $26 billion is actually $5 billion of bank money and the rest is your money.......

5. The enforcement is a joke. The first layer of supervision is the banks reporting on themselves......

8. If the new federal task force were intended to be serious, this deal would have not have been settled. You never settle before investigating.....

12. We'll now have to listen to banks and their sycophant defenders declaring victory despite being wrong on the law and the facts. They will proceed to marginalize and write off criticisms of the servicing practices that hurt homeowners and investors and are devastating communities. But the problems will fester and the housing market will continue to suffer....."

[chancellor]

http://www.huffingtonpost.com/yves-s...ss&ir=Business

Please tell me this one is all wet - aggregator Huffington Post is spotty at best, but they have some decent people on the big stuff and this article links to some other analysis.

Among the lowlights:

"Here are the top twelve reasons why this deal stinks:

1. We've now set a price for forgeries and fabricating documents. It's $2000 per loan. This is a rounding error compared to the chain of title problem these systematic practices were designed to circumvent. The cost is also trivial in comparison to the average loan, which is roughly $180k, so the settlement represents about 1% of loan balances. It is less than the price of the title insurance that banks failed to get when they transferred the loans to the trust............"

Wonderboy knows exact margins better than I do, but $2000/loan is no rounding error or trivial in comparison to actual profit made off a home loan. I came up with about $2200/loan, but two grand is close enough for discussion purposes.

2. That $26 billion is actually $5 billion of bank money and the rest is your money.

Ratio looks high to me - I'd expect it to be about $13bn in bank funds and $13bn in fed funds loaned to the banks at minimal interest.

5. The enforcement is a joke. The first layer of supervision is the banks reporting on themselves

Depends on what the backup is. Safety is managed in this manner, and facilities with proven good procedures and results get STAR approval, which means lower insurance rates and less hard inspections. But if you screw up, you get local, state and federal safety heat, get insurance rates jacked up, and so on. I know for a fact construction and heavy industry real safety numbers have greatly improved the last 20 years.

8. If the new federal task force were intended to be serious, this deal would have not have been settled. You never settle before investigating.

One assumes no investigation was done, but whoever wrote this truly has no idea. I'm certainly no fan of the Obama admin justice department, but even I'll give them enough credit to conclude they looked into the cases and saw difficult and/or very lengthy cases and concluded it was best to pursue a settlement.

12. We'll now have to listen to banks and their sycophant defenders declaring victory despite being wrong on the law and the facts. They will proceed to marginalize and write off criticisms of the servicing practices that hurt homeowners and investors and are devastating communities. But the problems will fester and the housing market will continue to suffer

Could be true.