OK, but it’s still unclear what effect this will have on the law regarding detention of American civilians:
Attorney General Eric Holder confirmed speculation Wednesday that President Barack Obama would issue a signing statement when he makes the National Defense Authorization Act (NDAA) and its controversial detention provisions law.
“We made really substantial progress in moving from something that was really unacceptable to the administration to something with which we still have problems,” Holder said in response to a question from the Wall Street Journal’s Evan Perez. “But I think through these procedures, with these regulations we will be crafting, we can minimize the problems that will actually affect us in an operational way.”
Holder said the language of the NDAA had been moved in a “substantial way” from some of the original language which led the president to issue a veto threat.
“So we are in a better place, I think the regulations, procedures that will help, and we’ll also have a signing statement from the president” which will help clarify how they view the law, Holder said.
If you do the math, $335 million divided by 200,000 is $1675 per borrower, and the settlement agreement indicates that the amount borrowers will receive will average $1600. While obeying the usual “no one admits to anything” forms, the settlement has language that indicates that borrowers were overcharged in the range of several hundred dollars to several thousand dollars. So at a superficial level, one might conclude the settlement amount is roughly in line with the damages suffered by borrowers.
But is it? First, we don’t know the distribution of the alleged damages. And there is a net present value issue. These abuses were first noticed by the Fed in 2006 (and since, as we wrote in 2007, the Fed was even more lax than the OCC in enforcing subprime-related legislation, one can assume the conduct was flagrant) and referred to the DoJ, and the Office of Thrift Supervision made a similar referral in 2008. So the conduct started before 2006 and continued to the end of the subprime market. Countrywide has thus has the use of its presumably ill gotten money all these years. And if this settlement is philosophically a disgorgement, that suggests that a fine is also in order. And there are other cute features, such as the settlement is to be administered by someone hired and paid for by Bank of America.
More important, given the number of people involved, one has to think that there are some cases where the difference between the cost of the loan these borrowers got and the cheaper ones they qualified for could have made the difference between a borrower making it versus going into delinquency. So for any cases where the overcharges tipped a stressed borrower into a foreclosure, the settlement is clearly inadequate.
This is how the DoJ sees the situation:
“Chances are, the victims had no idea they were being victimized,” said Thomas E. Perez, the Justice Department’s assistant attorney general for civil rights. “It was discrimination with a smile.”
That isn’t the way lawyers on the ground see it. For instance, I received this e-mail from attorney Michael Olenick, and I’ve heard similar accounts over the years:
Yves Smith on the lovely Christmas gift the DoJ just gave to Bank of America with their $335 million “record” settlement:
The second most common story I hear from homeowners — after being told to stop paying — is they were bait-and-switched to sub-prime loans. It happened to me. When people showed up to a closing there was a sub-prime loan when they’d asked for, qualified for, and agreed to a standard loan. But then they were told “you can walk away but then you’ll be in breach to the seller since we are offering you a loan, and then the seller will then sue you and you’ll ruin their own closing .. but don’t worry because you can always refi it into a prime loan.”
They’re paying a token fine for discrimination when, for once, on this issue, they probably weren’t discriminating at all: they were equal opportunity fraudsters.
So we have the appearance of justice being done, when much bigger crimes go uninvestigated and unpunished.
Political news junkies who already know Mitt Romney is the king of the flip-floppers are quickly finding out that he’d rather not even take any stand at all, just to be on the safe side:
[On three occasions] Wednesday, GOP presidential candidate Mitt Romney refused to take a stance on the biggest issue in Washington today: the extension of the payroll tax holiday. A huge bipartisan majority in the Senate passed a two-month extension of the cut, but the House rejected that yesterday.
A number of Republican senators have slammed House Republicans for blocking the extension, but on Fox News this morning, Romney wouldn’t say whether he sided with the House or Senate, dismissing the issue as an “internal battle.” “I’d like to see this payroll tax holiday extended,” Romney said, without saying for how long.
Later, on MSNBC, Romney downplayed the debate as being “deep in the weeds.” He offered only platitudes about hoping that the House and Senate “come together” to “get the job done.” “I’m not going to throw gasoline on what is already a fire,” he added…
…[And] in an event in New Hampshire… Romney — for the 3rd time — avoided taking a position on the House GOP’s position on the payroll tax holiday.
Newt Gingrich is a strong supporter of the sanctity of marriage — he’s said “I do” on three different occasions — but only if the marriage is between a man and woman. He made this quite clear to a gay Iowan who questioned him on the issue Wednesday:
Gingrich: “I think those for whom the only issue that really matters is the definition of marriage, I won’t get their support. I accept that as reality. On the other hand, for those to whom it’s not the central issue in their life, if they care about job creation, if they care about national security, if they care about a better future for the country at large, then I think I’ll get their support.”
Q: So what if it is the biggest issue?
Gingrich: Then I won’t get their support.
Q: How do we engage if you’re elected. Then what, what does that mean?
Gingrich: Well then you engage in every topic except that.
Q: Except it’s most important (some crosstalk).
Gingrich: Well, if that’s most important to you then you should be for Obama.
Q: I am, thank you (The two men shake hands).
Gingrich: It’s perfectly legitimate. I think it’s perfectly legitimate.