Experts react to the foreclosure settlement

[ProSense]

Experts react to the foreclosure settlement

Posted by Sarah Kliff, Ezra Klein and Suzy Khimm

<...>

Elizabeth Warren, Democratic candidate for Senate in Massachusetts (news statement):

“Today’s settlement shows a significant commitment to helping struggling homeowners stay in their homes. But it needs to be the beginning, not the end, of efforts to hold the big banks accountable with meaningful penalties that demonstrate the rules and the law apply to everyone, no matter who your friends are or how many lobbyists and lawyers you can hire. Moving forward, further investigation and prosecution are needed to bring our long national mortgage nightmare to an end.”

Dean Baker, co-director at the Center for Economic and Policy Research:

“I’m not thrilled with the settlement, since it doesn’t accomplish much, but at least it doesn’t preclude further civil or criminal suits. In terms of the commitment of payments in the form of write-downs, we don’t have a clear counterfactual that allows us to gage how much would have been written down anyhow. We also have the peculiar situation where the banks get to pay the penalty with write-downs of debts to MBS investors.

The big plus is that the settlement does not preclude further legal action on securities fraud and other issues. (New York Attorney General Eric) Schneiderman and the other holdouts deserve credit for this.”

Ira Rheingold, director of the National Association of Consumer Advocates:

“There’s a number of pieces that are a good step forward for a lot of home owners but it doesn’t do nearly enough to solve the problem...the part that could end up being most impactful are the new standards for how people will be treated if they wind up in default, what kind of protocol banks have to follow if someone requests a loan modification. Going forward, I think that and the principal reductions will be the most meaningful parts of this. I’m hoping that these new standards, going forward, will help consumers understand and get loan modifications in the future. “

Karen Nussbaum, executive director of Working America:

“The $26 billion is not what we wanted. We were hoping for much more. This is like pocket change. So we hope this is a down payment, and we’re hoping to see more positive action coming out of this federal investigations unit. But only a handful of people are actually going to have their payments reduced, and the people who have already lost their homes will get $2,000. That doesn’t come close to fixing the problem...this just doesn’t add up to the kind of relief that people actually need to stay in their homes.”

- more-

http://www.washingtonpost.com/blogs/ezra-klein/post/experts-react-to-the-foreclosure-settlement/2012/02/09/gIQALQhz1Q_blog.html

[msongs]

1. summary of the 4 people quoted in the OP - crappy settlement nt

[tridim]

2. Or if you're not a pessimist.. Tepid settlement, with lots of silver linings. A good start.

Doesn't nullify potential criminal prosecutions.

How you could read those four statements and come to your simple negative conclusion is beyond me.

[msongs]

4. I only read the actual words lol nt

[MrCoffee]

5. How could you read those four statements and NOT come to a negative conclusion?

Elizabeth Warren - "our long national mortgage nightmare". She really didn't say that, did she?

Dean Baker - "I’m not thrilled with the settlement, since it doesn’t accomplish much" and the big kicker "In terms of the commitment of payments in the form of write-downs, we don’t have a clear counterfactual that allows us to gage how much would have been written down anyhow. We also have the peculiar situation where the banks get to pay the penalty with write-downs of debts to MBS investors."
- Do you understand what he's saying? This is important. He's telling us exactly how we're getting screwed with this settlement. He's saying that this isn't really helping homeowners, since teh banks would have written down some of the mortgages anyway. And, the real kick in the crotch, the banks get to pay for the write-downs by issuing new debt obligations to mortgage-backed securities investors. The $20 billion is a scam, pure and simple. It's a handout to the banks to let them clean up their balance sheets.

Ira Rheingold - "it doesn’t do nearly enough to solve the problem" - the problem still exists. Ira's hopeful that maybe it won't be such a big problem in the future, but maybe the banks learned something here. OK.

Karen Nussbaum - "We were hoping for much more. This is like pocket change." and "this just doesn’t add up to the kind of relief that people actually need to stay in their homes.”

[tridim]

8. Because I didn't do what you just did and cherry pick the negative and ignore the positive.

Reading is fundamental.

[MrCoffee]

10. Point out the positive. Not the pie-in-the-sky hopes and dreams, the concrete positive.

I'll wait.

[ProSense]

3. Jared Bernstein's assessment is also good. n/t

[MrCoffee]

6. No, it's just a lot of wishful thinking and hopeful nonsense.

[tridim]

7. That's what I was talking about, blind pessimism.

Everything you see is negative and nothing is positive.

It's your right to think that way, but please don't assume that everyone sees things the way you apparently do through your shit-colored glasses.

[MrCoffee]

9. Where's the positive in Bernstein's statement?

Here’s what’s unique, useful and potentially important about the settlement: One of the main reasons the measures we’ve tried so far have underwhelmed is because they’ve all been voluntary from the perspective of lenders and servicers. No bank had to play along with HAMP or HARP. They had a choice of whether to respond to the incentives in the programs or not, and often it was “no thanks.” (By the way, that’s why I always liked the cramdown option — moves locus of action from solely being in the lenders’ hands.)

But the five banks named in the settlement must now set up processes to do refis and principal reductions. They don’t have a choice. And that’s a real advance.Who knows, with these processes in place, we can even dare to hope that the $17 billion, which is expected to be leveraged up to about twice that amount (i.e., banks are expected to provide a dollar of foreclosure prevention for $0.50 from the settlement fund) will be testing the waters for a deeper dive into mortgage modifications.”

Where's the positive there?

-Banks set up the processes to do the write-downs and refis. They get $20 billion in funny money to do this, and will finance it through institutional investors and Fannie/Freddie
-Dare to hope that the $17 billion is leveraged up. There's an equally valid chance that we're overpaying. From yet another Prosense link

In terms of the commitment of payments in the form of write-downs, we don’t have a clear counterfactual that allows us to gage how much would have been written down anyhow. We also have the peculiar situation where the banks get to pay the penalty with write-downs of debts to MBS investors.

Again, where's the positive there?

[tridim]

11. The positive is clearly stated in the two paragraphs you stripped out of his statement

You really need to try harder with your obfuscation attempts

[MrCoffee]

12. I directly quoted exactly what ProSense quoted of his statement

Exactly the same quote.

[tridim]

13. Prosense didn't quote anything from Bernstein's statement in the OP.

[MrCoffee]

14. Now you're just messing with me

Read post 3 and read who posted it.

[tridim]

15. "Jared Bernstein's assessment is also good. n/t"

That's it.

I really think you may have a vision problem. You're seeing things that just simply aren't there, and not seeing things that are there in the statement. Weird.

[MrCoffee]

16. Still waiting for the positives

[tridim]

19. Check your copy queue, it's probably still in there.

Or alternatively you can click on the link and actually read his full statement in the article.

[MrCoffee]

20. Reading is fundamental

I learned that from you.

[tridim]

21. I already read it. Saw the postives, saw the negatives.

You don't even know where you copied the text from.

[MrCoffee]

22. So you don't care to point out the positives?

That's fine if you don't. I mean, you could have just said so ages ago instead of flinging "shit-colored glasses", but you know, to each their own.

[tridim]

23. Read his statement, you'll see the postives. Don't worry, they are very concise paragraphs.

You probably saved 2k when you stripped them out of your "quote".

[MrCoffee]

24. Aaaannnnddd....scene

This was fun. About exactly as much fun as running head first into a completely blank wall, over and over again.

[tridim]

25. In case you were wondering, now I'm fucking with you.

Just read it, jebus H. key-riced.

Best thing about wearing shit colored glasses is, you can just take them off. Let me know if you need help with the procedure.

[Rex]

17. They want more justice

imo

[Major Hogwash]

18. Yabut, what about Joe the Plumber's opinion?

Or do we need to hear from him about this?

Or maybe Dennis Miller?

Ivana Cadaver, perhaps?