Many have weighed in, and I'm open to all opinions. But I always wait for Matt Taibbi on this subject — he's neck-deep in the Big Muddy and knows whereof he speaks.
Here's Taibbi on the just-announced foreclosure deal, brokered by conflicted Iowa AG Tom Miller and heavily promoted by Obama (my emphasis below):
So the foreclosure settlement is through.Taibbi calls it a "superficially face-saving peace offer". Here's why:
A few weeks back, I was optimistic about it – I had been worried that it was going to contain broad liability waivers for all sorts of activities, and I was pleasantly surprised when I heard that its scope had essentially been narrowed to robosigning offenses.
However, now that the settlement is finalized, and I've had time to think about it and talk to people who know far more than I do about this, I'm feeling pretty queasy.
So they settled the case in a way that reads in headlines like it's a bite out of the banks, but in fact is barely even that. There will be little in the way of real compensation for stuggling homeowners, and there are serious issues in the area of the deal's enforceability. In fact, about the only part of the deal we can be absolutely sure will be honored in full is the liability waiver for the robosigning offenses.Ready for more?
I think the best summation of the settlement is probably Yves Smith's, which can be found here. The piece lists the 12 things that suck the most about the settlement. The most painful is probably #12:Other fun reasons to hate this thing from Ms. Smith:12. We'll now have to listen to banks and their sycophant defenders declaring victory despite being wrong on the law and the facts. They will proceed to marginalize and write off criticisms of the servicing practices that hurt homeowners and investors and are devastating communities. But the problems will fester and the housing market will continue to suffer. Investors in mortgage-backed securities, who know that services have been screwing them for years, will be hung out to dry and will likely never return to a private MBS market, since the problems won't ever be fixed. This settlement has not only revealed the residential mortgage market to be too big to fail, but puts it on long term, perhaps permanent, government life support.
1. We've now set a price for forgeries and fabricating documents. It's $2000 per loan. ...There's more where that came from, sadly. Taibbi closes: "Shame on me for ever thinking that might be a good thing."
2. That $26 billion is actually $5 billion of bank money and the rest is your money. ...
8. If the new federal task force were intended to be serious, this deal would have not have been settled.
Feeling wonderful? I know I am. Mr. Schneiderman, you've gone from "presumed good" to prove it.
Hope you think you got a good trade, sir. By which I mean, I hope your Hamburger Today was the best you've ever had. Tuesday's coming; suggest you make it last.