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AFTER THE SETTLEMENT SETTLES

Legend has it the Europeans purchased Manhattan for $24 worth of beads
and mirrors almost 400 years ago. On Thursday, the United States Attorney
Generals sold out the American people for $26 billion dollars to the banks that
have defrauded our American dream. The terms of the settlement has not yet
been officially released. The terms need to be signed off by a judge and the
results might not be in effect for over a year. What this means to the
homebuyers is that the banks will escalate their foreclosures while they still can.
Most of us will not see any relief for quite some time, and others have already
lost their homes and future revenue. The banks that brought on this massive
fraud are getting by with a slap on the wrist. $26 billion dollars is a paltry sum
for causing the American people over $700 billion in underwater debt.

The estimated $10-$20 billion in the deal for principal reduction would
reduce only about 2% of the $700 billion in equity destroyed during the financial
crisis. And the banks themselves will only pay $5 billion out of their own pocket.
By far the lion's share of the cost will be borne by investors and taxpayers, who
had no part in the robo-signing scandal.1 Once again, the banks will be in
charge of fulfilling the settlement themselves.

What does that mean to a family of six or more who has already lost their
home? They will get a check for anywhere from $1,500 to $2,000, sometime
down the road, maybe a year to five years from nowmaybe. Meanwhile, their
credit has been ruined and they must find a place to rent that will take a family
with four or more children. I hear that there are more places available now that
the banks own most of the property, but for the most part 4 or 5 bedroom
rentals are a rare find. And with the credit of aforementioned family being
destroyed, it is not likely that they can rush out a purchase a more affordable
home. They will still have the option of bringing on a civil suit against the
lending institute, if they have any funds left with which to pay a lawyer.

In an article dated February 15th, 2012 in the New York Times, Gretchen
Morgenstern, reports about an audit in San Francisco, California that has found
broad irregularities in foreclosures.2

In a significant number of cases 85 percent documents recording the


transfer of a defaulted property to a new trustee were not filed properly or on
time, the report found. And in 45 percent of the foreclosures, properties were
sold at auction to entities improperly claiming to be the beneficiary of the deeds
1
"The Servicing Settlement: Banks 1, Public 0," Adam Levitin, Credit Slips, 02-09-12
2
California Audit Finds Broad Irregularities in Foreclosures - NYTimes.com
of trust. In other words, the report said, a stranger to the deed of trust,
gained ownership of the property; as a result, the sale may be invalid, it said.

The report went onto say that 340 of the 400 mortgages investigated had
irregularities.

Although massive wrongdoing has been documented by various agencies


throughout our government, the officials paid to protect the public interests still
have yet to charge the executives who have thrust our country into this financial
crisis.

In an article posted by the Washington Blog on December 14 th, 2011, it


was reported that fraud done by the big banks, more than anything done by the
little guy caused the financial crisis.3

The FBI estimates that 80 percent of all mortgage fraud involves


collaboration or collusion by industry insiders.

William K. Black professor of economics and law, brings us current to


where we are today: History demonstrates that if the control frauds get away
with their frauds they will strike again.

For those readers who doubt this is true, in an article released as recently
as February 20, 2012, just days after the announcement of a settlement: Two
AllianceBernstein LP mortgage specialists say they have hit on the next great
investment for institutional investors: securities based on a pool of residential
Freddie Mac and Fannie Mae mortgages that could blossom into a $250 billion to
$500 billion institutional market. Investors could fund the mortgage investment
from their real estate or fixed-income allocations. They said in the paper that the
safest mortgages would be included in the securities that would be fully
guaranteed by the government.4

By allowing the banks to use their political power to gimmick the


accounting rules to permit them to hide their massive losses on liars
loans we have made it far harder to take effective administrative, civil,
and criminal sanctions against the elite frauds that caused the Great
Recession. Hiding the losses cripples economic recovery and public integrity, and
leaves a broad based opening to repeat the fraud.

The FBI has written that any discussion of the crisis that ignores the role
of mortgage fraud is irresponsible. But instead of prosecuting fraud, the

3
The Big Picture FBI Estimates 80% of Mortgage Fraud Involved Industry Insiders
4
New pooled mortgage strategy touted for institutional investors - Pensions & Investments
government just continues to cover it up.5

The problem with this upcoming settlement is that it lets the banks off too
easily for their fraud. No criminal charges are being brought against the
executives that initiated this crisis and the taxpayer is still carrying the burden.

Some still say this settlement is better than nothingfor those of you who
still think soI hear that you can buy our country for a few beads and some
mirrors.

5
http://www.washingtonsblog.com/2011/08/real-reason-sec-hasbeen-
shredding.html

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