Pimco | $25 Billion Foreclosure Deal to Hit Pensions Harder Than Banks

Pimco | $25 Billion Foreclosure Deal to Hit Pensions Harder Than Banks

The government’s deal with banks over their foreclosure practices after 16 months of investigations is cheap for the loan servicers while costly for bond investors including pension funds, according to Pacific Investment Management Co.’s Scott Simon.

In what the U.S. called the largest federal-state civil settlement in the nation’s history, five banks including Bank of America Corp. and JPMorgan Chase & Co. yesterday committed $20 billion in various forms of mortgage relief plus payments of $5 billion to state and federal governments.

“This was a relatively cheap resolution for the banks,” said Simon, the mortgage head at Pimco, which runs the world’s largest bond fund. “A lot of the principal reductions would have happened on their loans anyway, and they’re using other people’s money to pay for a ton of this. Pension funds, 401(k)s and mutual funds are going to pick up a lot of the load.”

Read more: Pimco: $25 Billion Foreclosure Deal to Hit Pensions Harder Than Banks



4 Responses to “Pimco | $25 Billion Foreclosure Deal to Hit Pensions Harder Than Banks”
  1. Hell NO! No MORE Bankster BAILOUTS! says:

    Basically, the ‘borrowers’ who are fighting to keep their homes have also just lost more from any retirement account(s) they had. Talk about a double whammy for the typical 50- to 60-year-old homeowner.

    Think about all the rank-and-file employee, both union and non-union. Think about those accounts that we were told we needed because someday Social Security would NOT be there. Well, those retirement accounts have been taking heavy hits. A few have sued to force the big banks to take back the crappy mortgages that were not properly put into the retirement trusts. Now, some of those cases where there were already settlements will see that they really should have forced the buy-back of the loans, not accepted a ‘deal’ too. The retirement accounts have been looted by Wall Street.

    Some of the retirement trust investor groups are litigating to force these mortgages back on the banks. I hope a FLURRY of additional suits are filed and that additional investor groups join existing suits.

    This will be the only way the banksters actually see it hit their bottom-line. It is the ONLY way they take a ‘hit’.

  2. lvent says:

    GOOGLE SEARCH how many Senators and CONgress members and other traitor Politicians are heavily invested in PIMP-CO STOCKS….Everything these criminals do is for the benefit of the wealthy….All these crooks do is create more deceptions and lies to rob all of us….AKA FRAUD!

  3. gregory says:

    Where were these people when the AG’s were meeting? They come out after the fact when they knew what was going to happen before. How come their not at Capitol Hill just breathing down coongress back about the misuse that all of these fund are going to get from the settlement? Sso to me this article seems like just Propaganda to sooth the losses people are going to take. This article helps cover their asses when they make money off of this crap……

  4. Grim Rager says:

    This should infuriate more people, why aren’t these funds going ballistic?? Houses, pensions, lives. OCCUPY!

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