Friday, February 17, 2012

Taxpayers to pay bank settlements through Obama administration program

Remember just a week ago when the state Attorney Generals came to agreement with the banks on a settlement for the robo-signing and mortgage fraud during the housing bubble and credit crisis?  Well, for the taxpayers, it looks like it wasn't so great a deal after all as new findings show an Obama Administration program will allow the banks to pay the states out of funds provided by taxpayers.

US taxpayers are expected to subsidize the $40bn settlement owed by five leading banks over allegations that they systematically abused borrowers in pursuit of improper home seizures, the Financial Times has learnt.

...However, a clause in the provisional agreement – which has not been made public – allows the banks to count future loan modifications made under a 2009 foreclosure-prevention initiative towards their restructuring obligations for the new settlement, according to people familiar with the matter. The existing $30bn initiative, the Home Affordable Modification Programme (Hamp), provides taxpayer funds as an incentive to banks, third party investors and troubled borrowers to arrange loan modifications. – Financial Times via Zerohedge

HAMP is a program under the Obama administrations Making Homes Affordable program, and is taxpayer funded.

About Making Homes Affordable:

The Making Home Affordable Program (MHA) is an important part of the Obama Administration's comprehensive plan to stabilize the U.S. housing market by helping homeowners get mortgage relief and avoid foreclosure. To meet the various needs of homeowners across the country, Making Home Affordable programs offer a range of solutions that may be able to help you take action before it's too late.

Crony capitalism at its finest.  Not only can the Obama administration CLAIM they brought legal action against the banks in the name of the homeowner, but he will also be garnering favor on Wall Street by paying off their settlement agreement with taxpayer money.


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REO Rockstar

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