Saturday, May 19, 2018
Business

Reaction to the landmark $25 billion mortgage settlement pours in

The $25 billion mortgage settlement announced Thursday between five major banks and the government to help beleaguered homeowners launched a torrent of opinions. • Finally some help. Too little too late. The banks got off easy. Too many deadbeats get rewarded. • Here's a sliver of what was being said a day later about this landmark deal.

"The best thing about the settlement, frankly, is that it will be done. The shadow of the settlement hung over the market for a year now."

Stan Humphries, chief economist for Seattle-based Zillow Inc., told Bloomberg News

"(Home) seizures have been stalled awaiting this settlement. The homes in the foreclosure pipeline are four times the (current bank-owned properties), and yesterday's settlement is going to accelerate the seizure process. They have a total green light to seize those homes that are in the foreclosure process."

Scott Ryles, chief executive officer of Home Value Protection, a California-based insurance provider, told U.S. News & World Report

"… On the politics of it, I think for Obama it's a feather in his cap. It's a big number. It sounds like a big number. In proportion to the problem, it's small. But it's still a lot of money. And of course, it's the best, it's the ideal for a politician. It's people getting money, but through the coercion, if you like, of private industry. The banks. Rather than out of the Treasury."

Charles Krauthammer, syndicated columnist, told Fox News

"There's a reason this is so inadequate to the problem at hand. For the last three years, the policy has been to impose a political solution to a math problem. It hasn't worked. America simply has too much mortgage debt to pay back. Serious economic thinkers across the spectrum, from Democrat Alan Blinder to Republican Martin Feldstein to New York Fed president William Dudley, believe that there is only one solution — writing down the enormous, creaking mound of debt. This solution is currently off the table because writing down these unsustainable debts could cost our fragile banks enormous sums of money and possibly lead to a restructuring of one or more of our major banks. Avoiding this clear policy choice has resulted in our economy falling into a Japan-style 'zombie bank' torpor, with debts carried on the books at full value, which everyone knows will not be paid back at par."

Dylan Ratigan wrote in the Huffington Post

"This does not by any means stop the avalanche (of litigation) that is still headed toward banks. It's a large chunk of the litigation, but it's not the majority."

Nancy Bush, an independent banking analyst, told the Boston Globe, saying banks will probably have to deal with lawsuits related to the housing bust for at least five more years

"It's a big check with narrow immunity. You get the state attorneys general off your back, but you're not getting immunity from securitizations, which could come with their own steep cost down the road."

Paul Miller, a former examiner for the Federal Reserve Bank of Philadelphia and now an analyst with FBR Capital Markets in Arlington, Va., quoted by Bloomberg News

"This is neither the beginning nor the end of our work to hold banks and other institutions accountable for the destruction they've caused families, communities and country. (The) settlement should serve as a warning."

Illinois Attorney General Lisa Madigan, quoted in the Washington Post

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