"Remember that the entire Tarp bailout was initially sold as a solution to the housing meltdown, but was switched - before it was even approved - to a bailout for Wall Street."...
8/16/12, "Proof Positive that Government's "Homeowner Relief" Programs Are Disguised Bank Bailouts ... Not Even AIMED at Helping Homeowner," Zero Hedge, Guest post, G. Washington
"We pointed out last year: Huffington Post notes, in a story entitled “New Obama Foreclosure Plan Helps Banks At Taxpayers’ Expense “:
"A key new condition in the plan would shift the financial liability for refinanced loans from Wall Street banks to the American taxpayer. ***
The newly expanded program would expunge legal liabilities associated with mortgages refinanced through the program for the original lenders of the mortgages. Each time a bank sent a loan to Fannie and Freddie, it certified that the loan met Fannie and Freddie’s safe lending criteria. But many loans sent to the mortgage giants did not, in fact, meet those criteria. Currently, when borrowers default on those ineligible loans, the mortgage giants can “put back” the resulting losses onto the banks that pushed the loans. ...
While the revised program seeks to lower mortgage payments for underwater homeowners, the program does nothing to address the core problem -- owing more than the home is worth. Though borrowers may save hundreds of dollars a month in lower payments by refinancing, they routinely owe tens of thousands of dollars more than their homes are worth, even after receiving aid.
"In most cases people would probably be better off walking," said economist Dean Baker, co-director of the Center for Economic Policy and Research.
During a conference call with reporters, Department of Housing and Urban Development Secretary Shaun Donovan acknowledged that negative equity is a problem....
New York Attorney General Eric Schneiderman and Delaware Attorney General Beau Biden have both objected to the foreclosure fraud settlement talks on the grounds that they give away too much to banks without investigating the scope of fraud problems in the system. The Home Affordable Modification Program has been a hotbed for the kind of borrower abuses that the administration is pressuring lenders to settle over."
While this is outrageous, it’s nothing new. PhD economists John Hussman and Dean Baker, fund manager and financial writer Barry Ritholtz and New York Times’ writer Gretchen Morgenson say that the only reason the government keeps giving billions to Fannie and Freddie is that it is really a huge, ongoing, back-door bailout of the big banks.
Many also accuse Obama’s foreclosure relief programs as being backdoor bailouts for the banks. (See this, this, this and this).
In other words, yet another bailout for the big banks at the expense of the taxpayers … and the economy.
We noted in February: The 50-state settlement with the banks ... over mortgage fraud is a stealth bank bailout, according to many top observers. See this, this, this, this, this, this, this and this.
This is par for the course … All of Obama’s previous “mortgage relief” programs have really been stealth bank bailouts which screwed the homeowner. And see this.
We reported in April that the current overseer of the Tarp bailout program – the special inspector general for TARP, Christy L. Romero - said that the Tarp funds haven't been paid to homeowners, but have gone to banks....
“Look at the TARP money that goes out to the banks,” said Special Inspector General Christy Romero in an interview with The Huffington Post. “That goes out in a matter of days. This has been two years and only 3 percent of these funds have trickled out to homeowners.”...
The only way to really stimulate the economy would be for the government to give money to the little guy on Main Street – instead of the big boys on Wall Street. And see this.
Yet the big banks continue today to be bailed out through a wide variety of overt and hidden schemes … while the little guy gets nothing....
And last month, the former Tarp overseer - Neil Barofsky - noted last month:
The truth is that the administration – whether through principal reduction or otherwise – has never prioritized coming up with an effective approach to helping homeowners and reviving the housing market, even when it had a multi-hundred-billion-dollar TARP war chest at its disposal.
More dramatically, in his must-read book Bailout, Barofsky says the Obama Administration never cared if the HAMP mortgage modification program actually saved homeowners from foreclosure, and that Treasury Secretary Geithner said that the program was simply aimed at spreading out foreclosures over time to “foam the runway” for the giant banks so that a high number of simultaneous foreclosures would not jeopardize their balance sheets. See this 45-second video clip. [at link]...
Remember that the entire Tarp bailout was initially sold as a solution to the housing meltdown, but was switched - before it was even approved - to a bailout for Wall Street.
This is in addition to all of the government's other stealth bailouts to the big banks.
By choosing the big banks over the little guy, the government is dooming both."
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