OBAMAnomics…
Records show that four out of Obama's top five contributors are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
Obama has
done absolutely nothing about FORECLOSED ON AMERICA, after all the crisis was
caused by his criminal bankster donors, and they’re hauling in record profits
now. Obama has kept his promise of not punishing his banksters. Not even one
has gone to jail, or ever will be. Just as Bush 1 made sure his SAVINGS &
LOAN donors would escape by the statute of limitations, OBAMA will watch a
nation being foreclosed on as he fills his pockets with bankster pillage!
NO
PRESIDENT IN HISTORY HAS TAKEN MORE MONEY FROM BANKS THAN BARACK OBAMA.
Modification
blunders bedevil U.S. housing recovery
By Aruna
Viswanatha | Reuters – 2 hrs 40 mins ago
WASHINGTON
(Reuters) - Shirley Burnell, a community
activist from Oakland, California, has been
trying to get her subprime loan restructured since 2007.
She
never missed a payment, but the adjustable rate mortgage she got in 2004 shot
up to a monthly payment she could no longer afford.
First
she provided documents without getting any response, then she was denied in
April by her servicer, Bank of America, for not providing documents it
never actually asked for.
As
one part of the bank appealed that decision and approved her for a trial modification, another part denied her again -
twice - providing two new reasons in part based on inaccurate calculations,
according to documents reviewed by Reuters.
When
asked about Burnell's case, a bank spokesman said she was unable to qualify
under "imminent default provisions," a third reason that Burnell said
she had never been given.
At
one point, Burnell even received notice the bank would accelerate foreclosure proceedings, despite her perfect
payment record and the letter itself saying the bank owed her $281.01.
"They
gave you a funky loan in the first place, and now they're refusing to work with
people to get it worked out," Burnell said. "It just keeps you upset
all the time."
Bank
of America is "committed to keeping customers in their homes whenever the
homeowner has the financial wherewithal to make reasonable payments and the desire
to keep the home," a spokesman for the bank said.
Three
years after the foreclosure crisis began,
the process to apply for a loan modification remains a bureaucratic nightmare
that is complicating the housing recovery and could dull the impact of any Obama
administration initiatives in the works.
The
administration's biggest foreclosure-prevention effort, the Home Affordable
Modification Program (HAMP), targeted to help 3 million to 4 million
homeowners, has reached only about a quarter of that since its 2009 inception.
The
program pushed mortgage servicers to cut interest, extend terms, or defer parts
of a loan in an effort to reduce monthly payments and keep borrowers in their
homes.
But
servicers have dragged their feet on providing wide-scale modifications. They continue to lose documents,
use inaccurate numbers to issue denials, or both approve and deny applications
at the same time, according to housing advocates.
"It
delays resolution of the problem of defaulting loans and it is adding
uncertainty to the market," said Susan Wachter, a housing expert at the
Wharton School of the University of Pennsylvania.
Around
one in every 12 mortgages in the country is delinquent, and only a fraction of
them have received modifications.
"Somehow
the borrower is unreachable, or the servicer hasn't found the right way to
reach the borrower, but the fact is, we see (modifications) piercing maybe 10
to 25 percent of the potential population," said Diane Westerback, a
managing director of global surveillance analytics at Standard & Poor's.
Banks
have stepped up efforts to deal with the foreclosure crisis since 2009. Chase, for example, set up 82 centers around the
country specifically to deal with struggling homeowners. Wells Fargo hosts
one-day fairs for homeowners to bring in all of their paperwork and potentially
get approved for a modification on the spot.
Bank
of America says it has completed almost 1 million modifications since 2008, and
Wells Fargo says it initiated or completed more than two modifications for every
one foreclosure of owner-occupied homes in the past two years.
But
the majority of homeowners, advocates say, still get stuck in byzantine mazes,
with no real enforcement mechanism to pursue under HAMP.
"If
you get a minor traffic ticket, you get a right to an impartial hearing, but if
you are applying for federal home saving assistance, the bank is judge, jury,
and executioner," said Joseph Sant, a lawyer at Staten Island Legal
Services who helps defend homeowners facing foreclosure.
'GOING
IN CIRCLES'
It
took nearly one year for Hakan Tale to convince his servicer, Chase, that it
overvalued his house by more than $100,000 in rejecting a modification.
Once
he was able to convince Chase of that mistake, it rejected him again, dropping
his monthly income by almost $4,000 and determining he didn't make enough money
to qualify, even though his actual income had not changed.
In
November, more than two years after Tale first sought a modification, Chase
asked him to submit an entirely new application.
"Maybe
they don't want me to be an example for other people," said Tale, who
lives with his wife and three children in Staten Island, New York. "Any
excuse they find, they deny it."
"We
have worked with the customer and reviewed his application multiple times, and
have been involved in multiple mediation meetings," a Chase spokesman
said.
Another
Staten Island resident, 77-year-old Hamson McPherson, was first denied a
modification two years ago by his servicer, Wells Fargo, after it miscalculated
his income.
The
bank then served him with a foreclosure summons and complaint, which in New
York can lead to court-supervised settlement conference. But it stalled on
moving forward for so long that McPherson triggered the proceedings himself in
August 2011 to try to negotiate an alternative to foreclosure.
In
October, more than two years after he first applied for a modification, the
bank told him there was an investor restriction on the loan, which meant it
couldn't modify it.
That
investor agreement was public, Wells Fargo told him.
But
after confronting the bank with that agreement, which did not include any such
restriction, the bank told him there was a previously undisclosed secret
document that included the restriction.
"It's
a nightmare," McPherson said, "when you have these things, you don't
get proper sleep at all."
In
an ironic twist, the hold music played when he called Wells Fargo once was a
song called, "Going in Circles."
"I
listened to it for five minutes and then hung up because I was so upset,"
he said.
A
Wells Fargo spokesman said the bank has "worked for some time to find
payment assistance within the investor guidelines of the loan."
"We
continue to work with him to find alternatives to foreclosure," the spokesman
said.
'NOT
DOING THEIR JOB'
Even
with staff additions -- Chase, for example, added some 10,000 employees to deal
with defaults, and Bank of America increased its 5,000 employees to 40,000 --
individual negotiators can still have hundreds, or even thousands of cases
open, according to housing advocates.
Employees
can be so overwhelmed that applications languish for months. Banks consider
financial documents "stale" within two or three months, forcing
homeowners to provide updated documents all over again.
While
housing counselors have seen some improvements in the past few years, many
borrowers are still not even able to email applications in; they have to fax
them in, thus creating no real paper trail.
Carlos
Cespedes, an advocate with the Neighborhood of Affordable Housing in Boston,
said his files include 25 faxes of the same document, provided over and over to
a servicer that said it never received it or lost it.
One
of his clients traveled to Central America to obtain her deported husband's
signature on a document renouncing his interest in the property, but had to
send that same document six times to her servicer who kept losing it.
"These
are institutions that have taken a huge amount of bailout money. There should
be a level of responsibility to communities," said Josh Zinner, an
advocate with the Neighborhood Economic Development Advocacy Project in New
York. "HAMP is far from perfect, but the biggest problem is servicers not
doing their job."
*
http://mexicanoccupation.blogspot.com/2011/06/assault-on-america-by-obama-his.html
http://mexicanoccupation.blogspot.com/2011/08/barack-obama-one-of-greatest-tragedies.html
As part of the bank bailout, the Treasury Department was given $46 billion to spend on keeping homeowners in their houses; to date, the agency has spent about $1.85 billion.
*
They also say programs to curb foreclosure are voluntary, so they
are limited in how far they can push mortgage servicers and investors, who
often make more from foreclosures than from offering aid.
*
NEW YORK TIMESJune 4, 2011
For the Jobless, Little U.S. Help on
Foreclosure
The Obama
administration’s main program to keep distressed homeowners from falling into
foreclosure has been aimed at those who took out subprime loans or other risky
mortgages during the heady days of the housing boom. But these days, the
primary cause of foreclosures is unemployment.
As a result,
there is a mismatch between the homeowner program’s design and the country’s
economic realities — and a new round of finger-pointing about how best to fix
it.
The
administration’s housing effort does include programs to help unemployed
homeowners, but they have been plagued by delays, dubious benefits and abysmal
participation. For example, a Treasury Department effort started in early 2010
allows the jobless to postpone mortgage payments for three months, but the
average length of unemployment is now nine months. As of March 31, there were
only 7,397 participants.
“So far, I think
the public record will show that programs to help unemployed homeowners have
not been very successful,” said Jeffrey C. Fuhrer, an executive vice president
of the Federal Reserve Bank of Boston.
Data released
last week suggests that the administration’s task is only growing more
difficult as the problems created by unemployment and housing persist. New job
growth in May was anemic, and unemployment inched up to 9.1 percent, the Labor
Department reported Friday.
Earlier in the
week, a widely watched index found that housing prices had dropped to their
lowest level in nearly a decade. And while the rate of homes falling into
foreclosure has slowed, the reason is delays in processing foreclosures, not a
housing recovery, according to RealtyTrac, a company that tracks foreclosures.
There were 219,258 foreclosure filings in April, the latest month available.
Critics of the
Obama administration’s approach to preventing foreclosures have pressed for two
years to get officials to focus more of their attention on unemployed
homeowners, with meager results. As part of the bank bailout, the Treasury
Department was given $46 billion to spend on keeping homeowners in their
houses; to date, the agency has spent about $1.85 billion.
Morris A. Davis,
a former Federal Reserve economist, estimates that as many as a million
homeowners slipped into foreclosure because of insufficient help for the
unemployed.
“The money was
there and they didn’t spend it,” said Mr. Davis, an associate real estate
professor at the University of Wisconsin. “I don’t mean to sound outraged, but
I am pretty outraged.”
Administration
officials said their programs have had a positive impact, albeit not as large
as they had hoped. But they say that the problems of unemployment and negative
equity on homes are not easily solved. They
also say programs to curb foreclosure are voluntary, so they are limited in how
far they can push mortgage servicers and investors, who often make more from
foreclosures than from offering aid.
“We are trying to
be careful in designing programs that at the end of the day aren’t just about
spending money but getting people back on their feet,” said James Parrott, a
senior adviser at the White House’s National Economic Council.
President Obama
has been scrambling to curb the number of foreclosures ever since he arrived at
the White House.
At the start of
2009, the administration announced its primary foreclosure prevention
initiative, the Home Affordable Modification Program. It provides incentives to
banks to modify mortgages, reducing monthly payments for eligible homeowners.
The
administration said the program would help three million to four million
homeowners, but so far, only 670,000 homeowners have received permanent
modifications. In addition, the program was primarily meant for homeowners with
risky mortgages; jobless owners are often ineligible because some payment,
albeit reduced, is required.
Administration
officials said the program was helping homeowners whose income had been
reduced. Sixty-one percent of homeowners who received permanent modifications
listed “curtailment of income” as their reason for applying, though it is not
known how many of them are unemployed or simply had their hours or pay reduced.
The Department of
Housing and Urban Development received $1 billion as part of the financial
regulatory reforms that passed last year to help unemployed homeowners. That
money will be used to provide government loans to unemployed homeowners for up
to 24 months.
Though the
program was announced last fall, so far applications are being accepted in only
five states; the others are delayed because of “implementation challenges,” a
HUD spokeswoman said.
Critics do
acknowledge one bright spot — the Hardest Hit Fund, a federal program that will
provide $7.6 billion so that some states can administer their own programs for
struggling homeowners. Of that, 70 percent will be directed to unemployed
homeowners, said Andrea Risotto, a Treasury spokeswoman.
So far, $455
million has been spent. Over the last several years, academics, housing groups
and government economists offered proposals to Treasury officials to help the
unemployed avoid foreclosure.
One, which Mr.
Fuhrer of the Boston Fed helped write, called on the government to provide
loans, or grants, to unemployed or underemployed homeowners to make up for the
amount of income they lost. The loan would have to be repaid once the homeowner
found a new job.
Another proposal,
by a non-profit group called the PICO National Network, a coalition of faith-based
community organizations, would have allowed unemployed homeowners to postpone
much or all of their mortgage payments for a year or more.
But
administration officials have balked, arguing that regulators and “other
industry stakeholders expressed strong reservations” about allowing unemployed
homeowners to extend payments for longer terms, according to a Dec. 23 letter
that Treasury Secretary Timothy F. Geithner sent to Representative Barney
Frank, Democrat of Massachusetts, who had pressed for measures that would more
directly aid the unemployed.
The debate is
playing out on the sidelines of partisan Washington politics, since Republican
lawmakers have made clear they would like to get rid of anti-foreclosure
programs altogether, and would block any new programs. Instead, it is setting
homeowner advocates against administration officials over how to spend money
already appropriated.
Administration
officials maintain that the decision on whether to offer mortgage relief to
homeowners ultimately was up to mortgage servicers and investors, not the
government, which can provide incentives but not compel action.
“We as an
administration have limited levers,” Mr. Parrot said. “We can push them on the
margins.”
But Lewis Finfer,
a PICO organizer, said he could not understand why the administration had not
been more receptive given the extent of unemployment.
“We have a
program to deal with this,” he said.
Many unemployed
or underemployed homeowners said they would welcome an extended break in
mortgage payments.
Mary Ernest, 51,
of Blackstone, Mass., lost her job as a school aide and said she had been
“reduced to begging, more or less,” to keep her home. Adam Heyman, 41, of
Chelsea, Mass., scraped together enough money to pay the mortgage on his condominium
for about 18 months. Though he finally got another full-time job, his bank had
already foreclosed on his condo.
“If I had a way
to slow down the process or stop it for a while, that would have been nice,”
Mr. Heyman said, adding, “Now I can certainly afford to pay.”
*
OBAMA’S BANKSTER DONORS DOIN’ GOOD! PROFITS UP! FORECLOSURES
UP! BANK NO REGULATION GUARANTEED! BAILOUTS FOR BUYOUTS…. And not a single
bankster donor in prison!
WHAT DID THE BANKSTERS KNOW ABOUT OUR ACTOR OBAMA THAT WE
DIDN’T KNOW?
Records show that four out of Obama's top five contributors
are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG
($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
*
“Obama's
rhetoric covered the whole financial industry, but the key changes will affect
only a few high-profile players, including JPMorgan Chase & Co., while
sparing investment banks like Goldman Sachs Group Inc.”
*
Lou Dobbs Tonight
Thursday, July 9, 2009
And Harvard economics professor JEFFREY MIRON will weigh in
on the state of the U.S. economy—and why the only plausible argument for
bailing out banks crumbles on close examination.
*
"There
is a populist and conservative revolt against Wall Street and financial elites,
Congress and government," Democratic pollster Stanley Greenberg warned in
an analysis this week. "Democrats and President Obama are seen as more
interested in bailing out Wall Street than helping Main Street."
*
*
August 21, 2010
Janet
Tavakoli.President, Tavakoli Structured Finance
August 15, 2010
How to Thwart the Assassins of the
American Dream
*
Arianna Huffington's new book, Third World America: How Our
Politicians are Abandoning the Middle Class and Betraying the American Dream,
paints a grim picture of the State of the Union:
"Every day, Americans, faced with layoffs and tough
economic times, are forced to use their credit cards to pay for essentials such
as food, housing, and medical care -- the costs of which continue to escalate.
But, as their debt rises, they find it harder to keep up with their payments.
When they don't, banks, trying to offset losses in other areas, turn around,
hike interest rates, and impose all manner of fees and penalties..."
Third World America, (P. 77)
Our mediocre grammar school and high school educational
system continues its downward slide. The Great Recession is squeezing school
budgets. We are failing our children, our most important resource of all.
In 2009, the American Society of Civil Engineers gave the
nation's infrastructure a near failing D rating:
"Flip on a light switch, and you are tapping into a
seriously overtaxed electrical grid. Go to the sink, and your tap water may be
coming to you through pipes built during the Civil War. Take a drive, and pass
over pothole-filled roads and cross-if-you-dare bridges. The evidence of decay
is all around us." (P. 95)
The over-hyped American Recovery and Reinvestment Act of
2009 earmarked only $72 billion of the $787 billion appropriation of taxpayer
dollars to projects to improve the country's infrastructure.
Meanwhile, multi-national corporations avoid taxes,
sheltering $700 billion in foreign earnings to end up with a measly $16 billion
(2.3%) tax bill. GM is among those companies, yet it took almost a half billion
dollars in bailout loans. Boeing and KBR Halliburton are among the defense
contractors that avoid taxes, while enjoying government contracts worth tens of
billions.
Banks (not Fannie and Freddie) Crippled the Housing Market
Fannie and Freddie do not make loans. They purchase mortgage
loans and earn fees for guaranteeing payments on the loans. According to the
Mortgage Bankers Association, in 2006, Fannie and Freddie accounted for 33% of
total mortgage backed securities issuance. In the first half of 2010, they
accounted for around 64% of new issuance. They were forced to pick up the slack
and buy more when Wall Street's private label securitization Ponzi scheme blew
up.
Fannie and Freddie are Wall Street's dumping ground. They
would have had problems on their own, but their problems would not have been
close to their current scale, and they did not create the housing bubble.
Congress twisted arms to make Fannie and Freddie buy more
than $300 billion of phony "AAA" rated mortgage-backed securities
from banks, not counting loans that didn't meet their stated requirements.
Today Fannie and Freddie want banks to repurchase tens of billions of these
loans, since they fail to meet representations and warranties, and the banks
are fighting this obligation.
Top subprime lenders included Wells Fargo; Countrywide,
purchased by Bank of America; Washington Mutual, now part of JPMorgan Chase;
CitiMortgage, part of Citigroup; First Franklin (now closed), purchased by
Merrill Lynch, which was purchased by Bank of America; ChaseHome Finance,
JPMorgan Chase; Ownit, partly owned by Merrill Lynch, which was later purchased
by Bank of America; and EMC, part of Bear Stearns, which was purchased by
JPMorgan Chase. Most of the rest depended on massive loans from Wall Street.
Many of these lenders were sued by states for fraud and paid billions in
settlements.
According to Inside Mortgage Finance, the top mortgage
backed securities underwriters during 2005-2006, only two of the subprime abuse
years, included now defunct Lehman Brothers ($106 billion); RBS Greenwich
Capital ($99 billion); Countrywide Securities, which is now part of Bank of
America ($74 billion); Morgan Stanley ($74 billion);Credit Suisse First Boston
($73 billion); Merrill Lynch ($67 billion); Bear Stearns, which is now part of
JPMorgan Chase ($61 billion); and Goldman Sachs ($53 billion).
The above doesn't even include the credit derivatives,
collateralized debt obligations (CDOs), and structured investment vehicles
(SIVs) that amplified losses. Yet, Arianna notes how America imploded while
bankers soared:
"Someone like [Robert] Rubin is able to wreak
destruction, collect an ungodly profit, then go along his merry way,
pontificating about how 'markets have an inherent and inevitable tendency --
probably rooted in human nature -- to go to excess, both on the upside and the
downside.' This from the man who, as Bill Clinton's Treasury secretary, was
vociferous in opposing the regulation of derivatives -- a key factor in the
current economic crisis -- and who lobbied the Treasury during the Bush years
to prevent the downgrading of the credit rating of Enron -- a debtor of
Citigroup." (P. 150)
Robert Rubin operated an economic wrecking-ball from
prestigious positions of influence including former co-chairman of Goldman
Sachs, director of the National Economic Council, former Treasury Secretary
under President Bill Clinton, board member and senior "risk wizard"
counselor at Citigroup, member of the President's Advisory Committee for Trade
Negotiations, member of the SEC's Oversight and Financial Services Advisory
Committee, unofficial econmic adviser to President Obama, and co-chairman of
the Council on Foreign Relations.
Rubin is just one example of the many bankers, who helped
destroy the economy while creating a connected financial oligarchy.
Hide Billions of Losses, Take Bailouts, Collect Billions,
Skip Jail
Instead of apologizing for screwing up, the banks demanded
the Great Bailout. At the start of the meltdown, the IMF and the U.S.
administration estimated losses of $2 to $2.5 trillion. Unemployment and the
losses are now shockingly worse. What was merely a recession escalated into the
Great Recession.
How big are the actual losses? No one knows.
After destroying the value of major banks, culprits used
their enormous political influence -- funded with taxpayer dollars -- to get
Congress to force the accounting board to change accounting rules (as of April
2009) so banks don't have to recognize losses until they sell the assets.
According to William K. Black, after the much tinier S&L
crisis, there were over 1,000 successful felony prosecutions, several thousand
successful enforcement actions, and roughly 1,000 successful civil actions.
This time Congress gave us the Great Cover-up. Bank officers
dodged jail time and collected billions in bonuses. As one of my South American
friends observes, he's witnessed this third-world corruption before, and this
time it's in English.
Banks Stall the Recovery and Prolong the Great Recession
Unemployment marched upward, delinquencies soared, and banks
stalled foreclosures. The longer banks delay foreclosures and sales, the longer
they can avoid acknowledging losses. Phony accounting and zero cost funding
from taxpayers created an illusion of recovery.
Stalling helps banks while they pressure Congress to bail
out failed mortgages with taxpayer dollars. Instead of working out mortgages
with homeowners, they can wait for a government program to buyout or subsidize
their failing loans. The markets aren't recovering, because banks own colossal
chunks of mystery-meat assets.
It's a black hole of debt. If banks were forced to price
these assets at market values and sell them, the market would clear, and the
market would make a faster recovery. When Japan did this, it stalled its
economy for twenty years, and it still hasn't recovered.
Voters Must Demand the Solution
Voters must demand that Congress uncovers and publicizes
facts and prosecutes the financial system's massive multi-year frauds. This
will mean thousands of felony prosecutions, enforcement actions, and civil
actions.
Congress completely failed in genuine regulation and
enforcement. It must start over on financial reform, regulate derivatives,
commodities trading, update Glass-Steagall, and more. It will have to break-up
the Too Big to Fail financial institutions.
CEOs of our Systemically Dangerous Institutions (SDI's) fail
to manage them, because no one is capable of doing it. Like a morbidly obese junk
food addict, banks won't even get on a scale. Our banks refuse to properly
measure (account for) the problem.
Third World America elegantly summarizes the way forward.
Arianna Huffington names the culprits and gives a roadmap for solutions. The
rest is up to us. We deserve better than a third world economy divided by
ultra-rich on one side and debt-ridden middle class and dirt poor citizens on
the other. Citizens must demand a clean-up of corruption and a foundation for
healthy growth.
*
*
OBVIOUSLY WE ALL KNOW WHAT OBAMA’S DONE ABOUT FORECLOSURES.
AS IS ALWAYS THE CASE WITH THIS CLOWN, HE WENT LIMP ON THE TOPIC! AS SOON AS HE
FOUND OUT HIS BANKSTERS WERE MAKING HUGE PROFITS OFF THE VERY FORECLOSURES THEY
CAUSED, HE ASSURE THEM THE PILLAGING WOULD ONLY GET BETTER WITH HIM IN THE
WHITE HOUSE!
WELLS FARGO, AS NOTED BELOW, HAD THEIR CALIFORNIA MORTGAGE
LICENSE REVOKED IN 2003 FOR CORPORATE CORRUPTION AND MALFEASANCE. THE BANK
SIMPLY DECLARED ITSELF ABOVE THE LAW AND WENT ON PILLAGING AN ENTIRE NATION
WITH THE SAME EXPLOITIVE AND CROOKED DEVICES THAT HAD PROVEN SO PROFITABLE IN
THE PAST!
BOTH WELLS FARGO AND BANK OF AMERICA ARE MAJOR CAUSES OF
FORECLOSURE AND THIS NATION’S ECONOMIC MELTDOWN!
“I’M NOT HERE TO PUNISH BANKS!” BARACK OBAMA IN HIS STATE OF
THE UNION IN THE FACES OF A NATION RAPED BY BANKSTERS!
OBAMA WILL RANK AS ONE OF THE MOST LIMP AND CORRUPT
PRESIDENTS IN HISTORY!
*
Obama administration moves to quash
state investigations of Wall Street banks
By Andre Damon and Barry Grey
24 August 2011
24 August 2011
The
Obama administration has intervened to support a settlement by banks charged
with fraudulent practices in the processing of home foreclosures that would
prevent state governments, New York in particular, from carrying out their own
investigations of major Wall Street firms.
The
New York Times reported Monday that Shaun Donovan, the US secretary of
housing and urban development, together with high-ranking Justice Department
personnel, has been “waging an intensifying campaign” to persuade Eric T.
Schneiderman, the New York attorney general, to drop his opposition to a
settlement of the home foreclosure charges.
Under
the proposed settlement, major banks including JP Morgan Chase, Wells Fargo,
Citigroup and Bank of America, would pay a combined total of $20 billion, which
would supposedly go toward home loan modifications and homeowner counseling. In
return, bank executives would be shielded from possible civil suits or criminal
prosecutions arising from state probes into their role in fueling the sub-prime
mortgage bubble, whose collapse triggered the financial meltdown of September
2008.
Schneiderman’s
office has opened several inquiries into banking practices during the mortgage
boom of the mid-2000s.
Last
year it emerged that banks and mortgage companies forged documents and paid
employees with no knowledge of the homes in question to sign legal documents
that were then used to process foreclosures.
The
amount of the settlement of charges arising from these practices—$20
billion—represents a financial wrist-slap for banks that made multiples of this
figure from the creation and sale of securities linked to toxic home loans.
These banks have continued to reap huge profits from speculative bets in the
midst of a global economic crisis of their own making that has destroyed the
jobs and living standards of countless millions in the US and around the world.
Nevertheless, the banks have resisted paying even this token sum.
$20
billion will barely make a dent in a foreclosure crisis that has already thrown
millions of Americans out of their homes. US homeowners collectively owe the
banks $753 billion more than the market value of their homes.
Schneiderman
has based his opposition to the deal on provisions barring future litigation
against the banks. The Times quoted Danny Kanner, a spokesman for Schneiderman,
as saying, “The attorney general remains concerned by any attempt at a global
settlement that would shut down ongoing investigations of wrongdoing related to
the mortgage crisis.”
Schneiderman
is only the most prominent of several state attorneys general, including
Catherine Cortez Masto of Nevada and Beau Biden of Delaware, who have refused
to support the proposed settlement.
In
pressuring Schneiderman to drop his opposition to the deal, the Obama
administration claims to be motivated by a desire for a quick resolution that
would funnel $20 billion in aid to hard-pressed homeowners. “Our view is we
have the immediate opportunity to help a huge number of borrowers to stay in
their homes, to help their neighborhoods and the housing market,” Donovan told
the Times.
A
spokeswoman for the Justice Department echoed this line, telling the newspaper,
“The Justice Department, along with our federal agency partners and state
attorneys general, are committed to... bring relief swiftly because homeowners
continue to suffer more each day that these issues are not resolved.”
This
pretense of humanitarian concern for the plight of distressed homeowners is
utterly cynical and dishonest. Since the mortgage crisis began more than four
years ago, the government, first under Bush and then under Obama, has done
virtually nothing to help homeowners stay in their homes.
Under
Obama, the major cause of mortgage delinquencies and defaults has shifted from
predatory loan practices to the impact of prolonged unemployment. But the
administration has refused to take any serious steps to halt foreclosures in
deference to the banks, which fiercely oppose any measures that would
negatively impact their balance sheets or profits.
The
White House would have the public believe it a mere coincidence that its
newfound urgency in regard to the foreclosure crisis coincides with a campaign
by the banks to block legal action against them.
Executives
of the major banks are meeting with law enforcement officials Thursday, the Financial
Times reported, to continue negotiations over the settlement, which the
newspaper said remains several weeks from completion. Representatives of
Citigroup, JP Morgan Chase, Wells Fargo and Bank of America have remained in
“frequent dialog” with state attorneys general and prosecutors, the newspaper
said.
The
Times article noted that Schneiderman has also come under criticism from
the Obama administration for suing to block a separate deal reached earlier
this year that would settle civil actions filed by 22 institutional investors
against Bank of America. Investors, including the Federal Reserve Bank of New
York, the giant asset managing firm BlackRock, and Pimco, the world’s largest
bond fund, sued Bank of American over 530 mortgage-backed securities which the
claimants say were sold on the basis of false information.
The
deal, brokered by Bank of New York Mellon, would require Bank of America to pay
$8.5 billion to the investors holding these securities. Schneiderman intervened
to block the settlement on the grounds that the $8.5 billion represents a mere
fraction of investors’ losses and that the deal was worked out behind the backs
of many holders of the securities.
The
Times article reports a recent public altercation between Schneiderman
and Kathryn S. Wylde, the chief executive of the Partnership for New York City
and a member of the board of the Federal Reserve Bank of New York, which
supports the settlement. Speaking to the newspaper about her argument with the
attorney general, Wylde gives voice to the attitude of subservience to Wall
Street that characterizes the Obama administration and the political
establishment as a whole.
“Wall
Street is our Main Street—love ‘em or hate ‘em,” she tells the Times.
“They are important and we have to make sure we are doing everything we can to
support them unless they are doing something indefensible.”
Evidently,
the threshold in official circles for what is “indefensible” is infinitely high
when it comes to Wall Street. Under Obama, the federal government has failed to
file a single criminal charge against a high-level banker or even bring a civil
case to trial in connection with the fraud and lawlessness that pervaded the
dealings of the banks during the sub-prime mortgage boom and its catastrophic
aftermath.
This
is not for lack of evidence. Last April, the Senate Permanent Subcommittee on
Investigations released a 650-page report on the financial crisis that provided
a detailed factual account of banking fraud as well as the collusion of federal
regulatory agencies and the credit rating firms. The report concluded with a
list of federal securities statutes that it suggested had been violated by
major Wall Street firms.
The
Obama administration has ignored this report as part of its efforts to shield
the financial elite from being held to account for its actions.
Now,
having blocked any federal prosecution of senior bank officials, the
administration is intervening to quash investigations at the state level.
Nothing could more clearly demonstrate its role as a tool of the US financial
oligarchy.
*
OBAMA DEMANDS HIS BANKSTER DONORS BE ABOVE LAW
An initial term sheet outlining a possible settlement emerged in
March, with institutions including Bank of America, Citigroup, JPMorgan Chase
and Wells Fargo being asked to pay about $20 billion that would go toward loan modifications and possibly counseling for homeowners.
In exchange, the attorneys general participating in the deal would
have agreed to sign broad releases preventing them from bringing further
litigation on matters relating to the improper bank practices.
*
OBAMA AND HIS WALL ST CABINET
OBAMA’S CRONY CAPITALISM, A LOVE STORY BETWEEN THE ACTOR
PRESIDENT, AND HIS BANKSTER DONORS!
Records show that four out of Obama's top five contributors
are employees of financial industry giants - Goldman Sachs ($571,330), UBS AG
($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054).
*
Obama’s Economic Advisers: International
Socialists, Union Thugs, NBC Execs, Soros Scholars, Subprime Lenders, Amnesty
Shills, and Campaign Cronies
Posted on February 24, 2011 by Ben Johnson
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