Today, a smiling President Obama announced to the press that he forced America’s largest home mortgage lenders to pay $25 billion to compensate responsible homeowners who took out home mortgage loans they could afford for some intentionally vague wrongdoing. Our president was lying.
The Justice Department and state attorneys general threatened to prosecute the lenders for signing foreclosure complaints without actually reading them (aka robosigning) in a vain attempt to clear their books of hundreds of thousands of defaulting loans. The prosecutors claim robosigning was fraud, although no one was actually injured. All of the foreclosed borrowers had in fact defaulted on their loans loans and had spent months and even years living in these homes for free.
Furthermore, Obama administration was not seeking to compensate responsible homeowners. The vast majority of the defaulting homeowners were either subprime (bank-speak for deadbeat) borrowers who were given loans to meet government minority loan guidelines or borrowers who could make their mortgage payments, but decided to “strategically default” because the value of their homes fell.
The full array of government law enforcement power abused the criminal justice system to shake down home mortgage lenders to give borrowers still in their homes up to $20,000 of their loan and to give those defaulting borrowers who lost their homes to foreclosure up to $1,800 in cash. In sum, the Obama administration and state attorney’s general were literally buying votes by redistributing wealth from the shareholders and customers of home mortgage lenders to deadbeat borrowers.
Shakedown socialism at its most reprehensible.