February 9, 2012

Screwed and moving to Oklahoma

49 states have agreed to a $25 billion settlement with the five major banks in the nation that were accused of mortgage/foreclosure abuses.  Oklahoma is the only state with any integrity in this matter.

The big plan, finally, is to:
...force the five largest mortgage lenders to reduce loans for about 1 million households. The reduced loans would benefit homeowners who are behind on their payments and owe more than their homes are worth.
The deal includes $2.7 billion in guaranteed cash payments altogether, and estimates of $1.5 billion for payments to victims of wrongful foreclosure, $3 billion from a refinance program and $32.3 billion in homeowner benefits from loan modifications.
For those taxpaying citizens that have borne the burden of foreclosures, tanking home values, bank reform, etc., while still paying their own mortgage on a home that they have lost some, most, or all equity in - there is NOTHING.  And don't be fooled into thinking that the banks are actually shelling out their own money.  Fees and charges have increased for several years and are sure to increase even more as they have to cover this plan.  And who bears the burden of those increased fees and charges?  Those of us with money in the bank.
The agreement requires the banks to commit a staggering amount of money toward changing loan terms. At least $10 billion will go toward reducing the principal for borrowers who are delinquent or underwater borrowers at risk of default. At least $3 billion will go toward refinancing.
Is it just me, or does this plan seem to encourage people to default on their mortgages?  When decent, hardworking, bill paying people are stuck with higher interest rate mortgages because their home won't appraise for anything near what it did three years ago, something is desperately wrong with the system.  When the government is now forcing banks to reward people in default, instead of the people that have been helping the economy limp along, something is desperately wrong with the system.  What the hell have I been thinking, to cut back and make sure that we can meet our obligations?

I heard a statistic that 90% of the foreclosures in the U.S. would have happened eventually, no matter what.  Even if the banks had tried to re-structure loans, if they hadn't done the robo-sign thing, if they had reduced payments (while extending terms) - the fact remains that most of those people were going to permanently default anyway.  Many of them lived in the houses they weren't paying for, for months.  Now we are going to give 750,000 of them $2,000.  (Mind the line at the lottery ticket counter and the casinos).  

Blowie promised transparency, and there you have it.  The price of a vote?  $2,000 of someone else's money.


Titan Mk6B said...

Come on up. We would be glad to have you. Tulsa (well, outside of) is a nice place to live.

Maybe you can come back with my step-daughter and son-in-law. He works at Alliance. He is hoping he can bump someone here to keep his job with American.

InsomniacSeeker said...

Oklahoma just loves turning the screws. 77 of 77 counties in Oklahoma voted against Obama in 2008, and now we're not having any part of another bailout.

Harper said...

I hate that American is leaving Alliance. For their claims that it isn't a big part of the employment force, I sure see a bunch of people in American uniforms and can name a dozen or so that I know. No offense to Tulsa, but I can't imagine the facility there is nicer than this one. I do imagine we have more of an air traffic issue, though.

I might as well move to OK, my parents are spending my inheritance in Thackerville!