You can learn more about what's included by visiting the web site set up to explain the settlement. Ezra Klein collected the response of several experts to the deal and I found Jared Bernstein's (former adviser to Vice President Joe Biden and senior fellow at the Center for Budget and Policy Priorities) particularly enlightening.
Here are two reasons why I like the mortgage settlement agreement just announced: It’s not voluntary and it doesn’t require Congressional approval.
I’ll elaborate in a moment, but first, the caveats: It’s a drop in the bucket. There’s something like $700 billion out there in negative equity, and even with the leveraging — another attractive attribute of the way this should work — the $17 billion for preventing foreclosures ain’t gonna solve this.
But neither is any other single idea. Along with the other interventions policy makers are working on — ones I also hold some hope for — there’s clear potential to help distressed home owners and the macroeconomy.
He's addressing one of the main critiques I've heard about the settlement. People keep pointing out those figures of $700 billion of negative equity and this deal only providing $17 billion of relief (the remaining $8 billion of the $25 billion will go directly to those affected by the illegal foreclosures, the states and the federal government). Those using that argument don't seem to have much understanding of the legal system.
As I've said over and over - this case was about the narrow issue of robo-signing during foreclosures. While the settlement has been designed to provide $ for people who are currently underwater with their mortgages (estimates are that it will provide relief to 1 million of the 11 million in that situation), the illegal practice of robo-signing is not the cause of that particular problem. The relief the banks are providing as a result of this case should be commensurate to the actions that led to the suit in the first place. It was never going to be possible to solve the entire negative equity problem based on this one issue involving foreclosures.
Today Greg Sargent interviewed NY AG Schneiderman about the deal and he made this point very clearly.
In an interview with me just now, Schneiderman — who has gained a national liberal profile for his insistence on true accountability for financial institutions — conceded the settment announced today was “small” in financial terms, given the struggles of underwater homeowners and people who lost their homes.
But he insisted that time will show that today’s settlement was a win — that it secured a framework that will ultimately result in a true accounting of the role big banks played in sparking the economic meltdown.
“This is a small step in an economy where we have $700 billion in negative equity, but it is a significant step,” Schneiderman said, in response to criticism that the $25 billion settlement was far too small given the injuries sustained.
“This is a down payment towards the overall goal of accountability, meaningful relief for those injured by the meltdown, and getting the facts out so we can ensure that this never happens again.”
When Sargent pressed him further on some of the reactions to the settlement from the left, Schneiderman picked up on the meme I've been talking about for the last couple of days.
Asked if progressives should be skeptical of the administration’s assurances, given the lack of accountability so far, Schneiderman insisted that Obama’s private and public assurances have left him convinced he is serious about a real accounting.
“He took ownership of this,” Schneiderman. “Sometimes people on the left have to take yes for an answer. The President is accepting the challenge. It’s time for progressives to say, `okay, he’s moving with us now, he’s using resources of government to aggressively pursue the malefactors of great wealth, as Teddy Roosevelt put it.’”
But ultimately, what Schneiderman might not be aware of is the chronic nature of Obama Derangement Syndrome (ODS) with this crowd and that even though he was once deemed a hero by them, his actions today earn him a toss under the bus. From the ultimate bagger of fire herself:
We are especially disappointed in the “Justice Democrats” — particularly Attorney Generals Eric Schneiderman and Kamala Harris — whose complicity proves that any faith in their moral fiber or independence was misplaced. When Timothy Geither and the Obama White House pressed them to fold, they did so. At a time when America needs leaders to fight for justice and accountability, they chose to advance their own careers by protecting the corporations and bankers of the oligarch class — hoping that a few press releases filled with platitudes echoed through an expensive propaganda machine will fool a credulous public.
It does seem that I was quite premature in giving the Crybaby of the Day award to Matt Taibbi earlier for his inability to take "yes" for an answer about the changes underway on Wall Street. I apologize for that error. To correct it, I've reviewed the multitude of tantrums coming from folks who deem $17 billion in relief for 1 million Americans to be an outrage. But none tops Ms. Hamsher's aptitude for letting her ODS be persistent enough to accuse someone like Eric Schneiderman of selling out to "corporations and bankers of the oligarch class."
This one's for you Jane...