Banks Agree to $26 Billion Foreclosure Settlement with States, Federal Government

The political and corporate theater in the United States continues to ramp up as we head toward the November 2012 Presidential Election. The latest "indication of progress" is a $26 billion settlement that includes Bank of America, JP Morgan Chase, Citigroup, Wells Fargo and Ally Financial coming to terms with the federal government and states' attorneys general from most of the states in the country. On net, the settlement is expected to pay some victims of fraudulent foreclosure proceedings about $1500 to $2000 each, depending on how many victims actually file claims. That will amount to about $1.5 billion of the total settlement.

The rest of the settlement will be geared toward programs intended to "help" current homeowners who are unable to refinance because they owe more than their home is worth. Obviously, there will be myriad restrictions and bureaucratic red tape to overcome in order to qualify for such programs, but they will apparently exist for a fortunate few.

But the real victory here is for the banks, who are getting off almost entirely unscathed for rampant foreclosure fraud that, in a fairly executed legal system, would have resulted in far greater settlement sums and widespread criminal prosecution.

And, most importantly, the settlement paves the way for the foreclosure processing floodgates to open once again. This will help to clear the backlog of properties currently mired in foreclosure proceedings and the millions of properties that are waiting to enter the pipeline. And now that the foreclosure machine can get cranked up again, it will be these same banks and their corporate underlings who will purchase the foreclosed properties in bulk, at great prices, so that they can rent them back to the American people whose incomes decrease daily because of rising inflation, purposefully created by the government. Buckle up, people. It's going to be a wild ride for the next decade or so.