$26 billion sounds like a lot on the face of it. But take a look at the facts from this Yahoo! article:
- Trillions of dollars of household wealth lost after 2008 market crash
- Homeowners illegally foreclosed on get $2,000 for their trouble. (Would $2,000 make you feel better about losing your home?)
- At-risk homeowners can get the balance of their loan reduced by up to $20K (Underwater homeowners owe approx $50K more than their homes are worth)
- Banks only kick in $5 billion of the $26 billion! The rest of the $20+ billion comes from loan guarantees paid for by investors (i.e. taxpayers, i.e., you).
- That $5 billion cost is shared between multiple banks, which, after dividing it up, is a mere drop in the bucket for them (JP Morgan and Wells Fargo alone made a combined $33.8 billion in profit just in 2011).
See Yves Smith’s article on other reasons why this deal stinks.
So, congratulations taxpayers on succeeding in having your tax dollars diverted back to yourselves in helping to write down the value of your own home loans so that the banks don’t take the hit!
It’s unreal how, after perpetrating the largest financial fraud in US history while simultaneously wiping out average Americans’ net worth and bringing the global economy to its knees, banks once again get by with a slap on the wrist. But then again, it’s not so surprising, considering how much lawmakers themselves share in the record profits. After all, banks aren’t paying government officials all that money just to have those officials turn around and impose fines for the banks’ illegal activities, now are they?