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Related: About this forumUS taxpayers to subsidise $40bn housing settlement
Banks get bailed out, we get sold out: deja vu all over again edition. From the Financial Times:
US taxpayers are expected to subsidise the $40bn settlement owed by five leading banks over allegations that they systematically abused borrowers in pursuit of improper home seizures, the Financial Times has learnt.
The deal, agreed last week, calls for Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial to pay about $5bn in cash fines and to reduce monthly payments and loan balances for distressed US borrowers by as much as about $35bn.
However, a clause in the provisional agreement which has not been made public allows the banks to count future loan modifications made under a 2009 foreclosure-prevention initiative towards their restructuring obligations for the new settlement, according to people familiar with the matter. The existing $30bn initiative, the Home Affordable Modification Programme (Hamp), provides taxpayer funds as an incentive to banks, third party investors and troubled borrowers to arrange loan modifications.
Neil Barofsky, a Democrat and the former special inspector-general of the troubled asset relief programme, described this clause as scandalous.
http://www.ft.com/intl/cms/s/0/29834f52-582b-11e1-bf61-00144feabdc0.html#axzz1mZtdETrW
The deal, agreed last week, calls for Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial to pay about $5bn in cash fines and to reduce monthly payments and loan balances for distressed US borrowers by as much as about $35bn.
However, a clause in the provisional agreement which has not been made public allows the banks to count future loan modifications made under a 2009 foreclosure-prevention initiative towards their restructuring obligations for the new settlement, according to people familiar with the matter. The existing $30bn initiative, the Home Affordable Modification Programme (Hamp), provides taxpayer funds as an incentive to banks, third party investors and troubled borrowers to arrange loan modifications.
Neil Barofsky, a Democrat and the former special inspector-general of the troubled asset relief programme, described this clause as scandalous.
http://www.ft.com/intl/cms/s/0/29834f52-582b-11e1-bf61-00144feabdc0.html#axzz1mZtdETrW
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US taxpayers to subsidise $40bn housing settlement (Original Post)
girl gone mad
Feb 2012
OP
Very suspect. HAMP was dead anyway. Any new spending would need Congress.
banned from Kos
Feb 2012
#7
Mojorabbit
(16,020 posts)1. I agree it is scandalous. nt
DeSwiss
(27,137 posts)2. Let's remember to ''keep looking forward'' now......
...cause looking backards' can strain yer neck.
- And I won't even mention what ''looking backards'' can do to campaign donations........
K&R
phasma ex machina
(2,328 posts)3. Giddy up tax donkeys!
CAPHAVOC
(1,138 posts)4. Even better than the BP "settlement" that gave half the money back to BP.
This is getting bad. And now I see they are throwing the unemployed under the Bus.
Po_d Mainiac
(4,183 posts)5. A nice cut for BoA'holes
BofA, for instance, will be able to use future modifications made under Hamp towards the $7.6bn in borrower assistance it is committed to provide under the settlement. Under Hamp, the bank will receive payments for averting borrower default and reimbursement from taxpayers for principal written down.
Po_d Mainiac
(4,183 posts)6. To open FT pieces without registering
copy/paste the headline and open via a search engine link
banned from Kos
(4,017 posts)7. Very suspect. HAMP was dead anyway. Any new spending would need Congress.
Resurrecting HAMP would not be a bad idea if there were enforcement this time.
But FT is a great source.
Will withhold judgement until the contract is released.
dixiegrrrrl
(60,010 posts)8. Arrrggghhh
Just when you thought it was safe to go into the water.........