Matt Taibbi | Attorneys General Settlement: The Next Big Bank Bailout?

Attorneys General Settlement: The Next Big Bank Bailout?

Will any AG settlement cover that potential liability? I have no idea. But if the settlement is broad enough, and covers all activities connected with securitization, it might very well cover these unpaid fees.

How many hundreds of millions in fees will the states lose if that deal goes through? Has anyone even asked? Have any county officials even been consulted?

The point of all of this is, if you add up all of the MBS-related liability out there, the banks as it stands are facing an Armageddon of claims from all sides. It can’t possibly be less than a trillion dollars, and it’s probably much, much more.

But the Obama administration’s current plan is to let them all walk after paying a few shekels apiece into a $20 billion kitty.

Certainly, of course, one can see the logic of a universal deal that avoids the probable end result minus a federal settlement – bankruptcy for one or more of the big “TBTF” companies (especially Bank of America). After all, if all the suits go through, then the final settlement for most of those defrauded parties will be squat or close to it, since there won’ tbe any money left to recover. So if they can come up with a deal that satisfies plaintiffs at least in part and keeps the banks solvent, I suppose that might be a good thing.

But the negotiators really have three actors they have to consider: the banks, the investors, and the homeowners, who of course were also victims of this artificial bubble.

The current proposed deal is a huge giveaway to the banks, a major shafting to most of the investors, and would probably give homeowners either next to nothing or some cosmetic reward, i.e. a little bit of principal forgiveness, counseling, etc.

If the Obama administration was serious about helping actual human beings through this settlement, then it would be fighting for homeowners to get the same bailout the banks would get. If the banks are getting a trillion or more dollars of legal immunity, why shouldn’t homeowners get that much debt forgiveness? Or, half that much? A quarter?

It’s encouraging that California and New York have already come to this conclusion. Hopefully, down the road, there will be a settlement, but one that’s fair to everyone. It’s probably up to the states to stop this TARP-on-crack of a deal.

Full article here…


13 Responses to “Matt Taibbi | Attorneys General Settlement: The Next Big Bank Bailout?”
  1. Ron Moss says:

    My VA was turned down by a seattle VA specialist I served from “48 to ’53 and never touched my VA benefits

  2. Elyse says:

    Margin Call opening later this month…..


    Movie site…..

  3. retiredesq says:

    Read with great interest the Matt Taibbi article on the fact that New York and California have withdrawn from the proposed AG Settlement Fund. He certainly demonstrated just how inequitable that Fund would be. And the numbers did not reflect the damages sustained by the homeowner victims of the bank fraud. It is hard to imagine how anything helpful to the homeowner can emerge from all the conferences, chatter and blogging that is our daily preoccupation. There is some good news in California where two attorneys are preparing to take on the major banks for “servicer abuse”. (which just may be even bigger than robo signing and transfer tax avoidance). Additionally, it appears that the head of the OCC in a very recent speech confirmed that his office is taking immediate action against the 14 major banks with detailed inquiries into each of their foreclosures instituted between January 1, 2009 and December 31, 2010. While he admits this is an enormous task, they have already examined 200 such foreclosures from each bank so as to be able to create a valid examination process to determine where damages have been inflicted. There is also no monetary limit on those damages. So, while it may take a long time, there are some signs out there that the homeowner is not going to be totally ignored. I enjoy Matt’s articles and I hope he will explore these recent events. Thanks for sharing his article with us.

  4. Readdocs says:

    What ever deal is handed to the banks will not cure the title issue. The government
    will probably push all facets of the real estate, mortgage field into more fraud to
    cover up the crimes already committed by the tbtf banks. They believe they
    can continue to cover up the fiasco of destruction of our unalienable right to the
    pursuit of happiness (private property ownership). This is one of the precious rights
    we are all born with given by the Creator. Not by the state or the nation, and not by
    man. If this is not an unalienable right then it means the strong man can rip any and
    all rights from us with force, such as the communists have done in past history.

  5. tonycat says:

    Has Mr. Taibbi thought about the TITLE problems? Also, why are the title insurers quiet about all the mortgage problem and the securitized loans?

  6. leapfrog says:

    I’m skeptical that there will be a settlement. I tend to agree with Yves on Naked Capitalism, who has really been keeping an eye and diligently reporting on the “settlement” talks and all the PR spin surrounding them. But I also don’t have a crystal ball. It would be HORRIBLE if there were a settlement absolving the banksters of their crimes in one fell swoop – absolutely HORRIBLE.

    I liked the “TARP on crack” description – lol. I think a longer but more apt description is: “28 Trillion in Fed Secret Loans and Discount Windows on Crack and Steroids Deal”

    Let’s suppose there are “settlements”. What about the toxic derivative exposure that has yet to blow up? Zero Hedge had an article that the US alone has 250 Trillion in derivative exposure – JPM Chase accounts for 78 trillion alone. Will the “deal” cover the derivatives? And just what about the REMIC fraud?

    How can anything be “settled” when it has YET to be investigated?

    • Ramon says:

      Possibly most of the AG’s are guilty of collusion and accessory after the fact. Being that the AG offices are staffed with attorneys in private practice, it seems logical; to believe that the AG offices are staffed with those who are guilty of the crimes for which they are investigating, or providing protection for their criminal defence clientele.

      • Ramon says:

        Its called a CONFLICT OF INTEREST!

      • Ramon says:

        Investigate any present or past asst AG’s, asst DA’s, etc and staff who have or have ever had clients who work for the VA loan guarantee office. Dig deep. Very deep. Leave no stone unturned. No lead ignored. That might help.

  7. talktotennessee says:

    What concerns me is that this settlement will go through.
    The banking industry will then move on to support a GOP slate, allowing one of the nominees get in by default. Although Obama hasn’t picked up the flag and run with it for us, the big danger is that one of those jokers running against him will finish us off in support of big banking. There isn’t a one of them that has said a single word in support of homeowners or against the banks for their predatory role in shafting investors or homeowners. The silence is deafening. In fact most would cut benefits for seniors before tackling banking CEOs. So what to do? Stay with the devil you got or bring in someone who will sell us out, making matters worse. Washington is paralyzed right now, elect a GOP roster and what you will see is a wholesale, off the hook, bailout for big banking and Corporate control. Eight years of a plutocracy and we will have to riot in the streets to get our benefits or government back.
    This is an example of how votes are controlled:
    Today, there are hearings in TN to protest a new photo id law that the TN Republican controlled legislature put in place for next year. This law forces everyone to have a photo id. It will eliminate elderly, rural and disabled non-driving voters from easy access to the polls as they must secure a photo ID before they can vote, often driving a distance to a driver station in a larger city. All in the name of protection from fraud, a minor problem, could easily be handled with other forms of identification or careful poll worker efforts, to verify registration. No, the TN legislatrue would rather disenfranchise elderly voters who might support Social Security and Medicare along with African Americans who often vote for Democratic candidates. Any Republican voter loss would be minimal compared to a loss of hundreds of votes from the elderly voting for candidates that support keeping Social Security and Medicare. Our current roster of Republican presidential candidates have all vowed to gut earned programs like SS and Medicare, when all that is needed is fine-tuning.
    For Obama haters: He can’t be here longer than 4 more years but if we lose Social Security and Medicare you will see poverty unimagineable, parents, grandparents, families will be hurt.
    Think about it?

    • To tell The Truth says:

      SS is not what it used to be…and they have been steeling benefits from others…also, if they would change the original plan they instituted when it began from paying a measly $250.00 for funeral benefits which can not even cover the death announcement, to a decent number that would take care of your burial expenses then perhaps the SS might continue to work…the SS funds are all mixed up in other funds…and is included in the bailout funds so there are really no money left for the SS that can be invested wisely for us…I am not depended on any SS for my future security…what I am paying in wont help me in anyway….

      • lvent says:

        Yes, they are all sneaky theives who have been made to prove no accountability for what they do with all of our money…I am all for Dylan’s idea, Separation of Government and State…Get all of their greedy FEDERAL hands out of the taxpayers cookie jar…!!!!!

  8. Ramon says:

    Unknown to the VA Loan ‘Guarantee’ Officer? Really? No kickbacks or double dealing? Really? Just thinking out loud.

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