- Mortgage robo-signing settlement not actually as punitive toward the banks as you might think, succeeds in sticking costs onto various parties not at table [FT, more (US taxpayers could wind up covering much of write-down costs through HAMP program); Felix Salmon (write-downs of underwater mortgages should not be assessed at face value); Mark Calabria, Cato and more, Bloomberg (banks managing to offload much of the cramdown onto investors such as pension funds); Daniel Fisher/Forbes one, two, three (banks get covert benefits, politicos get social engineering and fees — shades of the collusive tobacco settlement!); Above the Law (Schneiderman steers money to legal services programs); Linette Lopez, BI (banks still exposed on many issues). More: Hans Bader, John Steele Gordon.
- “Burned at mediation by my own Facebook post” [Stuart Mauney, Abnormal Use]
- As anti-discrimination law advances, religious liberty retreats [Roger Pilon, Cato] Two views on the birth control mandate [Cathy Young, David Henderson] More: Adler, Frum.
- Motel Caswell case from Tewksbury, Mass. heads to court, could test forfeiture law [Balko] More: Washington Post editorial.
- Which is more unreasonable, OSHA regulation or FAA’s? Open to dispute [John Cochrane, Grumpy Economist]
- Indiana becomes a right to work state. On to Michigan next? [Shikha Dalmia, Reason]
- Warning! Tale of trial psychologists in wizard garb comes from a sinister source, namely me [“In the News,” forensic psychologist Karen Franklin, handsome illustration swiped from Cato site]
Filed under: aviation, banks, discrimination law, Facebook, forfeiture, Indiana, labor unions, Michigan, mortgages, OSHA
7 Comments
Mortgage robo-signing settlement not actually as punitive toward the banks as you might think
The only way that could be true is if it gave the banks free blackjack and hookers. Maybe I’m just cynical.
What is the IRS position on these mortgage write-downs. A borrower whose house in under water but is having no problem making his current payments may well not want to participate in this program if the IRS is going to charge them taxes (at top marginal rate) on the difference. If not careful this could lead to more defaults and foreclosures. $500,000 mortgage, $300,000 value could result in owing $50,000+ in taxes.
Thanks for mentioning my post on Abnormal Use. We have gotten some interesting comments.
David, just forget the blackjack! =o)
Mark Biggar: “$500,000 mortgage, $300,000 value could result in owing $50,000+ in taxes.”
Well, they could just take out a second mortgage to pay the tax liability! Oh, wait, no they can’t. OK, so the IRS slaps a lien on the property, then takes the property. It’s all part of their plan! 🙁
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