Govt. Extorts $26 Billion From Banks

Katy Grimes: California’s Attorney General, together with the attorneys general from 42 states, have pulled off a $26 billion shakedown of private mortgage lenders across the country, in what many are saying is a move to help balance state government.

Worthy of a Jesse Jackson Rainbow PUSH Coalition shakedown, California stands to receive an $18 billion share of the total shakedown, “which could reach $45 billion, depending on negotiations with other banks.” No one is yet sure how the $26 billion “settlement” could morph into $45 million.

There were  reports that the Obama administration was actually fighting for $300 billion from banks, but settled on the $26 billion.

But what has been glossed over in much of the media is that most of the mortgage loans were given to  people who should not have received the  mortgage loans in the first place.  These same people found themselves substantially underwater as soon as the real estate market tanked.

This is nothing more than a dose of social justice during an election year. The assumption by the left is that if  people are underwater in their mortgages, they must be victims of predatory lending.

But what about the people who lied about their incomes and assets? During the real estate boom, I had employees ask me to lie on bank income verifications so they could purchase homes. And, there were the shady lenders who never waited for a response for income and employment verifications before approving the employee’s loan.

There was greed on both sides. There is no doubt that banks were out of control, but where were the government regulators? Also out of control were the greedy “victims” who deserved to own a home, and would lie

This shakedown will solve nothing. We’ll see if it goes to “victims” or to state’s general funds.

FEB. 10, 2012