From Abigail Field:
A shocking aspect of the proposed foreclosure fraud settlement among Bailed-Out Banks, the state attorneys general, and the Feds has rightly gotten a lot of attention, namely the Bailed-Out Banks’ ability to use other people’s money to pay their ” penalty.” I confess, when I first heard about it, I figured it was a testament to the federal government’s craven capitulation to the Bailed Out Banks. (Let’s call them the B.O.B.s, rhymes with S.O.Bs.) But now I know it’s much worse than that, thanks to excellent reporting by David Dayen. The federal government really wants the B.O.Bs to use pension fund money to pay their ” penalty.”
Now, readers know I’m not exactly a Pollyanna, but I feel like one now. See, I thought our federal government understood that the right way to penalize someone with a fine was to actually make them pay the bill. I thought the feds realized the best way to punish the banks was to have them cough up cash into a BP spill-type fund, and have 50 special masters (one per state) use it to pay down mortgages, thereby punishing banks and helping homeowners. I just figured the Feds had rushed things so much, doing essentially no investigation, that they didn’t have the goods to leverage a better deal. But no. The Feds see the banks’ ability to spend firefighters’, teachers’ and cops’ money as a design feature, not a flaw.
This is the kind of news that really needs to get out to the people. I have come to the realization, after fighting for homeowners for years now, that the banks will never pay, they will only keep dipping into the pockets of the taxpayers – with the government’s permission. This is an election year, people need to know their pension funds are another source of BAIL OUT. The country is starting to pay attention, and actually react,( I always wondered where the rage was). Will the media take this story?
Great reporting, don’t keep it quiet.
Before signing anything, these settlement-hungry AGs should read carefully Gretchen Morgenson’s article yesterday, A Mortgage Tornado Warning, Unheeded, together with the accompanying history of the federal and private perpetrators who took it upon themselves to eviscerate the state real property recording acts with their own in-house mortgage and note computer system, MERS, that screwed up the foreclosure process and made a sham of due process. That alone requires a systematic probe of a procedure that made a sham of foreclosure proceedings and proof of ownership of loan documents that historically protected homeowners from illegal foreclosure proceedings. As a former AG and President of the National Attorney Generals’ Association, I am outraged at the presumption of current AGs to settle these critical matters without adequate investigation or even knowledge of what drove the crisis and where the responsibility lies.
John MacFarlane