But how successful the settlement will be remains to be seen. The New York law firm Grais & Ellsworth is organizing a coalition of mortgage investors to contest and possibly sue Bank of America over the plan. The plan, the law firm said on its Web site, "will violate the rights of the investors in the securitizations of (Countrywide's) loans."
Greed. Greed. Greed.
I have stated the bail out is not going to work and this is why. Humans are naturally greedy. They want what is "theirs" despite the potential problems associated with that GREED.
While I think everyone should pay what they owe on their mortgages, and they need to be held accountable for their actions and this includes signing on the dotted line for a mortgage, there is some value in working with them to get the mortgages paid and keep them in their houses.
Having a million people default on their mortgages is WAY bad all around. It is bad for local communities (hello the down side of property tax being the financing method for state and local government and school distracts.)
It is bad for real estate professionals - who pay big time taxes for each sale they are paid on.
It is bad for communities because if people lose their homes a good number of them will enter the ranks of the homeless.
I could go on and on.
I admit the bailing out of these people, some of whom did not qualify for a traditional mortgage is egregious, but the alternative is unpalatable also.
For the folks who are now going to get reduced payments out of their CMOs - the people you should sue is not the banks trying to work out a payment arrangement, which sure cuts into the return of your investment, but it creates cash flow nonetheless. The people you should SUE is the jackass who sold it to you and the dishonest guy who packaged the bad debt right along with the good debt!
These mortgage pools - are a nothing more than packages of crap and I still do not see anyone getting carted off to jail because they committed fraud and let's all be honest - it is fraudulent to sell pools of mortgages in which the top line items are clean A rated paper and the rest of it is not even worthy of being toilet paper. They who bundled it, organized it, sold it, rated it and so forth need to spend some time in a dark hole, with the prospectuses they printed for the CRAP as their only source of toilet paper and then I might feel vindicated. I might be motivated to say that their punishment was sufficient. MIGHT!
As always the rats on Wall Street, those who played fast and loose with the rules are laughing all the way to their bank in the Caymans and that my friends - is the real shame of it all. We pay so they can continue to play.