You may have been seeing or hearing some news headlines in the last few weeks or so about a settlement being reached between the big banks of America and housing market regulators. It is claimed that this settlement will finally be holding banks to account for questionable conduct that in no small part led to the bursting of the housing market bubble and the consequent financial crisis that has been devastating so many American lives.
Well, before we get too excited about this supposed dose of accountability directed towards the banking industry, let’s take a bit of a closer at why it may not be all that it’s cracked up to be. Here are reasons why this settlement may mean more good news for the big banks of America than the struggling homeowners that it is meant to benefit.
The mortgage settlement terms have not been released, but more of the details have been leaked, and here are just 5 of the reasons why this so-called settlement stinks to high heaven and back:
- The top 5 banks involved in the settlement are expected to fork out around $26 billion. But wait a second. The bulk of this amount (close to $20 billion) takes the form of credits for principal reductions which will be shouldered by Fannie Mae and Freddie Mac, therefore by you, the taxpayer! Only $5 billion in hard cash will be expected to come from the 5 banks in question, and that’s not $5 billion each, either. Suffice to say, the amount in question is one that these banks are laughing their backsides off over. It’s an amount relevant to each bank that doesn’t even represent a major quarterly loss. In fact, the quarterly put-backs from you, the taxpayer (via Fannie and Freddie) to these banks have been operating at this level. Bottom line: To what degree will these banks feel the impact of this settlement? Well, you might think of it as the equivalent of a mosquito bite while you’re asleep that you barely notice in the morning.
- The ‘enforcement’ of this settlement is one royal fiasco. The initial layer of regulation takes the form of the banks in question reporting on themselves. Do you see anything a tad misguided with that notion? I’m betting you do.
- If the recently appointed federal task force had any serious aspirations of investigating wrongdoing on the part of the banks, this settlement would not exist. Why? Because no professional and legitimate investigator agrees on a settlement before the investigation has been done. Where’s the good in settling over blatant, widespread misconduct in a manner that is highly favorable for the chief suspects, without any authentic attempt to research the pertinent facts? Not cool in the slightest.
- Even with no formal, thorough investigation taking place, there is already a massive list of abuses that are already known that have failed to meet with the attention of the mainstream media or attorney generals across the country. Exaggerated/impossible charges, widespread inaccurate documentation, completely fabricated charges, bankruptcy filing abuses, and on and on we go.
- This settlement has illustrated that the residential real estate market is apparently one of those “ too big to fail enterprises”. It is an enterprise that will now most likely continue to be a drain on government resources, and therefore the vary homeowners who have been exploited. Banks and their sociopathic sympathizers will boast of their victory, all the while the problems remain and rot, continuing the onslaught of pressure and victimization experienced by the American homeowner.
If this settlement demonstrates anything, it’s that the notion of the American people having their interests represented by anyone in a position of influence is for all intents and purposes, well and truly dead. Or, at least, it’s a notion that is critically maimed.
About Carla Ghosn
|CEO and Founder of MyCaal.com, earnestly helping American homeowners save their home. If you need loan modification help, visit MyCaal.com to access loan modification software that helps you get pre-qualified and prepares your loan modification package online.|