Foreclosure-abuse settlement reached with major banks

[Dacien]

http://abcnews.go.com/Business/wireS...0#.TzQKn072Zbw

In the $25 billion dollar deal, nearly 1 million households will have their loans reduced, in addition to $2,000 checks being written to roughly 750,000 Americans.

Good news, right?

[Archangel Tyrael]

Good news, right?

gute Neuigkeiten... nah that doesn't make it sound better in german anyway...

I would like to comment further but i don't know what this ''house bubble burst'' refers to so...

[Arog]

http://abcnews.go.com/Business/wireS...0#.TzQKn072Zbw

In the $25 billion dollar deal, nearly 1 million households will have their loans reduced, in addition to $2,000 checks being written to roughly 750,000 Americans.

Good news, right?

We will probably blow it on flat screen tv's and margaritaville mixers. I don't think more bail outs are the answer to be honest.

Edit- But then again I don't have a better idea to offer.

[Skippy88]

Quote from the article:

Those who lost their homes to foreclosure are unlikely to get their homes back or benefit much financially from the settlement.

Good news but you have to wonder if it's a little too late for some people. I also wonder how much people's loans are being reduced. The 2K is nice but just a drop in the bucket.

[Badpaladin]

Well, I suppose it might not be a good idea to invest in BoA.

[Deleted]

Nice moral hazard there. Here's another angle at it:

"The US taxpayers bailed out the banks, which are now using the balance of said proceeds to pay a settlement which amounts to the tune of $2,000 per every person foreclosed on in the past 3 years, in order to assure their vote for Obama, while in the process trampling contact law, as no longer will anyone in America honor anything printed and signed."

[Dacien]

There's a lot of bad angles on this, Diurdi, for sure.

[luckygac]

So... the people who couldn't pay their debts they knowingly signed into get paid 2k$, the banks who knowingly approved risky loans pay a portion of money they were given by taxpayers to pay off this settlement, and the only people who had nothing to do with either side (taxpayers) get to pick up the bill?

SOUNDS LEGIT BRO

[Purlina]

Not sure exactly what resolution people are looking for....

Jail time for bank executives?

[Biohazardx]

So... the people who couldn't pay their debts they knowingly signed into get paid 2k$, the banks who knowingly approved risky loans pay a portion of money they were given by taxpayers to pay off this settlement, and the only people who had nothing to do with either side (taxpayers) get to pick up the bill?

SOUNDS LEGIT BRO

Pretty much.

I just bought a lotto scratcher with a dollar I borrowed from a friend. Said I would pay him back when I won the cash. Didn't win anything after all. Will you give him a dollar for me and then give me another .50 cents to waste on some bubble gum.

That's essentially what this is.

[Deleted]

Jail time for bank executives?

Maybe a proper investigation of what fraud was actually committed. Maybe send some bank excecutives to those infamous prisons that the US has, so that their rectal parts can be gently caressed.

That's essentially what this is.

Put down large amount in cash for mortgage, pay down your mortgage on time = Massive fool, a real loser

Put down nothing, no ability to repay, make nothing but minimum payments = Innocent victim of wallstreet greed, get bailed out

[Laize]

Well, I suppose it might not be a good idea to invest in BoA.

I would contend that it's a great idea to invest in BoA right now.

For every $8.24 share you buy you get claim to $13.72 of tangible equity (real estate and such) and $21.84 in total equity (include securities plus the first figure).

Not to mention the fact that BofA is still very much a profitable institution and the largest bank in the country.

While their earnings have been in the shitter, I don't think such losses are here to stay. I dare say that a fair value for them sits around the $30-$35 mark. I mean if you buy shares for $8.24 and they liquidate tomorrow, you'll get at least $13 for every share you own.

Sure there's plenty else that goes into it, but I've been eyeing BofA for a while now.

[Archangel Tyrael]

What's this house bubble burst?

Anyone got a decent link or can explain without too much fuss what it is about?

[Skippy88]

Essentially Arch banks were approving mortgages that they knew the homeowner couldn't afford. So, homeowner buys the home but then realizes they can't keep up with the mortgage payments so the bank forecloses the home.

There's more to it then that but that's the basic gist of it. My parents just bought a place in Florida and the neighborhood is just filled with foreclosure homes.

[Deleted]

Essentially Arch banks were approving mortgages that they knew the homeowner couldn't afford. So, homeowner buys the home but then realizes they can't keep up with the mortgage payments so the bank forecloses the home.

Alot of the buyers knew they couldn't afford the houses in normal situations, but they thought the value of their house would go up 10% per year for infinity which would've meant that the house would've financed itself. They got greedy too, but it was all a bubble.

[Dacien]

Rush was making the argument that pushy salesman-like tactics are not trickery. Trickery would be lying about the price of the home.

[Archangel Tyrael]

Ah i see. That explains a lot. Well, i never needed a loan, but don't you have to prove that you can pay that money back?

[Badpaladin]

Ah i see. That explains a lot. Well, i never needed a loan, but don't you have to prove that you can pay that money back?

That's (one of) the main reasons the economy fucking flopped -- it really wasn't required.

http://en.wikipedia.org/wiki/Subprime_mortgage_crisis

[Laize]

Essentially Arch banks were approving mortgages that they knew the homeowner couldn't afford. So, homeowner buys the home but then realizes they can't keep up with the mortgage payments so the bank forecloses the home.

There's more to it then that but that's the basic gist of it. My parents just bought a place in Florida and the neighborhood is just filled with foreclosure homes.

You make it sound like the banks were making out like bandits on the deal.

[Skippy88]

Ah i see. That explains a lot. Well, i never needed a loan, but don't you have to prove that you can pay that money back?

That's the point. Homeowner gives their income, bank punches all that into their calculator and says "Congrats your approved" when in reality they should have said "Denied".

---------- Post added 2012-02-09 at 05:51 PM ----------

You make it sound like the banks were making out like bandits on the deal.

From what I remember and someone with more knowledge help me out but in most of these cases the banks would resell the mortgage to someone else. I would have to think they got their full amount bank so yes I do think they made out like bandits. It sure as hell wasn't the homeowner that made out like a bandit.