50-State, $25B Mortgage Settlement: Relief for Struggling Homeowners or Bailout for Big Banks?
Excellent analysis of the mortgage settlement from Democracy Now:
The U.S. Justice Department has unveiled a record mortgage settlement with the nationís five largest banks to resolve claims over faulty foreclosures and mortgage practices that have indebted and displaced homeowners and sunk the nationís economy. While the deal is being described as a $25 billion settlement, the banks will only have to pay out a total of $5 billion in cash between them. We speak to one of the settlementís most prominent critics, Yves Smith, a longtime financial analyst who runs the popular finance website, "Naked Capitalism." "The settlement, on the surface, does look like itís helping homeowners," Smith says. "But, in fact, the bigger part that most people donít recognize is the way it actually helps the banks with mortgages on their own books... The real problem is that this deal is just not going to give that much relief."