1. If you've already been foreclosed, you won't get much help;
2. If the FHA, Fannie or Freddie owns your mortgage, you don't qualify;
3. If your mortgage is held by a private investor, i.e., it's been securitized, you don't qualify.
So, this won't help a whole lot of people.
And, this modicum of help, by itself, spread out over three years, will likely only move the housing market from anemic to just bleah. Psychologically, it remains to be seen how much this boosts confidence levels among consumers looking for homes, or banks looking to lend.
Finally, in yet another example of Dear Leader's looking forward, not backward, it's not much more than a slap on the wrist for those big five.
Update: Michael Hiltzik, the excellent columnist and reporter for the L.A. Times, weighs in on just how good the deal is for the banks. And, even more, for the politicians:
I believe the technical term for all this is "big whoop." The provisions mostly require mortgage lenders and servicers to comply with what I would have thought was already the law, which prohibits, you know, criminal fraud. The rest is pretty much out of the best-practices manual of customer service, which benefits both the customer and the institution.Not much more to say than that, is there?
What the standards do accomplish is to expose how sad our enforcement of the law has been up to now, and how hard it will be to enforce it in the future if this is the best we can do in the face of manifestly illegal behavior. The lesson is: Break the law, and the full weight of the state and federal governments will come down on your head to make you agree not to break the law — in the future.
It may not be long before the euphoria over the settlement evaporates in the realization that the banks that made a travesty of the mortgage market are still getting a pass — not only on their cupidity in making loans to unqualified buyers, but in magnifying their cupidity through forgery, lies and the other building blocks of foreclosure fraud.
I expected the bullshit from Dear Leader, but, to see state AGs who were reportedly "hanging tough" to cave like this is dreck.