CNN spins the Wall Street mortgage fraud settlement as an Obama forced homeowner bailout, while not even mentioning the settlement was for the banks fraud and illegal activities.
Scouring the Internet for today’s latest news, CNN’s top headline was ‘Rage grows over mortgage deal’.
For those not familiar with the mortgage deal being talked about, it is a settlement with Wall Street banks who have illegally and fraudulently foreclosing millions of homes over the last several years.
Not having proof they even owned a mortgage, banks would purchase fake documents from a mortgage industry foreclosure catalog and pay off crooked judges to sign them and foreclose on homeowners.
The epidemic caused hundreds of thousands of people to be foreclosed on even though they were in fact current on their mortgage.
In several cases, banks have even foreclosed on homes – sending the local swat team to remove homeowners – that didn’t even have mortgages on them.
The government’s response to this activity has been to allow the banks to enter a deal, which is really just another stealth bank bailout, where they would not be criminally or civilly liable for their activities.
Instead the deal will send out a $2,000 check to each of the over 750,000 people who can prove they were improperly foreclosed upon which doesn’t even cover the moving expenses and does nothing to remediate the fact their homes were stolen from them outright.
Other provisions of the deal will allow homeowners who are fortunate to still have their homes to refinance at a lower rate and some will even qualify for a reduction in their mortgage principal.
For the most part, the public has been silent about the atrocities these Wall Street banks have committed and there was an even larger deafening silence that the government is allowing them to get off the hook by giving them immunity from both lawsuits and prosecution.
So when I saw the CNN headline ‘Rage grows over mortgage deal’ I though to myself “Good. It is about time people are getting pissed off the government is allowing this shit to happen.
I saw that the story was the most popular on CNN so I decided to click through to see why so many people were actually started to get pissed off about the situation.
As I read the article, my job dropped.
Not one single mention of the Banks Fraud.
Not one single mention of the illegal foreclosures they committed or the devastating consequences the victims have suffered.
Instead, CNN has spun the whole story making it sound like Obama has forced 5 Wall Street banks into footing the bill for a homeowner bailout.
Yes, people are in a state of ‘rage’ because Obama is forcing another bailout not because the banks are getting away with their crimes.
The story goes on to explain more of the rage is because any mortgage sold to Fannie or Freddie is exempt from the fraud settlement, which is over half the mortgages in the US.
Instead of mentioning the fraud or quoting victims of the fraud, the story instead quotes homeowners complaining that they don’t qualify for the deal.
Keep in mind the context of the crisis, which is the GOP charging democratic policies forced these Wall Street banks into lending to homeowners who really couldn’t afford the loans in the first place.
To even piss the reader off even more, the story has attention grabbing headlines about homes of the super rich being foreclosed on, which drives home the underlying theme that America is full of ‘welfare queens’ with the ‘entitlement mentality’ whining because they can’t get their hands on this ‘bailout’.
Here is the article read it for yourself. Then check out the comments on the story and read for yourself why people are in a state of ‘rage’.
Rage Grows Over Mortgage Deal
NEW YORK (CNNMoney) — As more details emerge about the massive $26 billion foreclosure settlement between the five biggest mortgage lenders and the states’ attorneys general, a growing number of borrowers are realizing that the deal will do little, if anything, to help them out.
Proponents of the settlement deal tout that roughly 1 million homeowners who owe more on their homes than their homes are worth are expected to have their mortgage balances lowered through principal reductions and another 750,000 would be able to refinance into loans with lower interest rates.
However, that’s only a fraction of the 11 million homeowners who are currently underwater on their homes, according to CoreLogic. And it’s also a mere sliver of the 3.5 million people who lost their homes to foreclosure over the past four years.
“The impact [of this settlement] will be small,” said Mark Zandi, chief economist for Moody’s Analytics. “It’s not a home run; it’s a single.”
Principal reductions will also only apply to certain borrowers who have mortgages still held by the five major lenders: Bank of America, CitiBank, Wells Fargo , J.P. Morgan Chase and Ally Financial.
Borrowers who have a mortgage held by Fannie Mae or Freddie Mac — roughly half the market — are out of luck. Loans insured by the Federal Housing Administration are also ineligible.
“If it’s offered to one group, it should be offered for all,” said Stacy Ovendale from Seattle, who says her home has lost nearly 50% of its value. “When my mortgage was written up, I had to take whatever program was available to me at the time, which happened to be FHA. … It’s so frustrating because my loan is with Bank of America but since it’s FHA, my mortgage is current and I have chosen to be responsible, there is nothing they can offer me in the way of principal reduction.”
Edward DeMarco, the director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, said he won’t allow the agencies to reduce borrowers’ loan balances because it is unfair to taxpayers and works no better than other foreclosure prevention methods, such as lowering interest rates, extending loan terms or delaying payments.
To Cat Gouldman, who lives in the D.C. area, it’s a raw deal. Like her mortgage, most loans are not retained by the original lenders. They’re sold to Fannie or Freddie. Borrowers aren’t given a choice when their loans are sold.
In fact, the mortgage Gouldman and her husband took out changed hands several times. First, it was sold to Wells Fargo, then to IndyMac and then it was taken over by Fannie. Her home has lost about half of its value, she said, and she’s upset that she won’t be able to get the same principal relief that other borrowers will receive.
“This is not the right message for the federal government to send out,” she said. “Do homeowners walk into banks asking if their loan is backed by Fannie Mae? I don’t think so.”
“I think it’s a travesty,” said Derek Buckingham of Everett, Wash., who has a Freddie loan. “The government appears to still have no accountability for the problems they helped incentivize the banks to create.”
Some borrowers may qualify for much larger reductions than others, as well.
Bank of America, for example, said it will slash mortgage balances by an average of $100,000 or more for roughly 200,000 homeowners. The goal, according to BofA, is to reduce the amount owed on the home to 100% match the current market value. Meanwhile, the other four major mortgage lenders, CitiBank, Wells Fargo, JPMorgan Chase and Ally Financial, are expected to reduce qualified borrowers’ principal to between 115% and 125% of the value of their homes — an amount that the Department of Housing and Urban Development said should average about $20,000.
For the homeowners who bought responsibly and made their payments faithfully, the real inequity comes in the fact that their tax dollars are paying for government-funded programs to prevent foreclosures while irresponsible borrowers accrue the benefits like the ones offered in the settlement.
“So, these people who are underwater get a break from the banks, and other hard working folks like us get screwed?” wrote Karthik Subramanian, of Aurora, Ill., in an email.
“What I think is unfair, is that people who didn’t overleverage their homes, who paid their mortgages on time, who didn’t borrow more than they could afford, even if the bank said they could afford more, the people who had good common sense and have done the right thing, are left with all of this business loaded on their backs,” wrote Jamie Smith of Sonoita, Ariz.
That said, every homeowner could benefit from such bailouts if they help to turn around the ailing housing market, where home price declines and slow sales continue to threaten the fragile economic recovery. The settlement, however, may not help enough borrowers to do even that, said Moody’s Zandi.
Source: CNN Money