- no criminal prosecutions for fraud or admissions of wrong doing;
- only $17 billion for principal write down to borrowers who are facing foreclosure compared to total negative equity of $700 billion;
- the banks already have reserves set aside for the deal achieved with the help of near zero interest funds from the Federal Reserve;
- only $5 billion of payments is from banks, the rest is from securitized loans;
- restitution for fraudulent loan documentation (60% error rate in one sampling) has been priced at $1500-2000 per loan foreclosed on between September 2008 and December 2011, a fraction of the average loan amount of $180,000 or about 1% of the outstanding loan balances.
Thursday, February 09, 2012
States Let Banks Off
The mortgage settlement between 49 states' attorney generals and the banks may sound large--$26 billion--but its peanuts for the big banks whose misfeasance in the sub-prime mortgage market led to a worldwide financial crisis that still reverberates through western economies. All the corporate news markets have details, so go there for a run down. What readers of this post should know is: