You would think that a drum roll, fireworks and popping champagne corks should have greeted today’s news that the five largest banks in the U.S. agreed to a $26 billion settlement for the roles they played in the mortgage meltdown.
After all, as many as two million Americans could reap financial benefits from the settlement, the largest of its kind in history, and the biggest civil-action suit ever against the housing industry.
Forgive me for turning smiles upside down into frowns, but there is a huge HOWEVER here.
This settlement is a joke that will leave blisters on the hearts of folks who faced living the rest of their lives in the doorways of abandoned buildings.
The $26 billion price tag is a joke, given the rogue and sometimes criminal behavior of the banks, and is a mere pittance compared to the trillions of dollars homeowners collectively lost during the subprime debacle.
The money will likely help only a small portion of borrowers facing foreclosure, depending on how effectively President Obama’s Washington minions manage the deal.
The fine print in the deal is enough to make you carve your eyes out with a steak knife. One settlement site says that it can take up to three years for homeowners to know if they’re even eligible for a cash payment.
Victims losing their home in a foreclosure can expect a cash payment of only between $1,500 and $2,000. Bully for them. That might cover the costs of a rented truck, storage costs and a Big Mac after they get the boot.
Federal bank regulators should have been cracking down on banks that were routinely evicting people despite incomplete documentation.
The U.S. Justice Department and other federal agencies should have been on the banks like white on rice when they were caught fabricating legal papers and routinely “robo-signing” thousands of affidavits at a sitting.