Thursday, February 9, 2012

$25 Billion National Mortgage Settlement

Out of the $25 billion settlement, Hawaii's share is a whopping $71 million. Even more whopping is the distribution to each Hawaii claimant .... $2000 per (actually up to $2000). That's like the bank wavering a month's mortage payment. Why who wouldn't be happy about that. Especially since you'd never ever finish paying the full mortgage even if you mailed in payments monthly for the next 50 years. There are band aids fixes and then there are band aids fixes so to speak. Also, $2000 pales in comparison to the $100,000 bonus that the bank's upper echelon gave themselves after the bailout money was in the vault. Why am I bringing up this topic? Well, the settlement should have provided for construction workers still outta work because of the fraud. True, construction workers were paid for building the new houses and new apartments units to meet the demand. However, they weren't paid anymore than their union wages. Then there's the issue of 'not working' where construction workers aren't earning any wages at all or very much of it. And since there's a backlog of unsold houses and foreclosed houses on the market, the construction industry will lag behind the rest of the economy even if this recession recedes. That might take years more.


Kay said...

I'm so sorry, Ron! Wouldn't you know it, we renovated our home at the peak housing market. It was hard to find good contractors. I wonder if it would have been a whole lot cheaper if we waited a couple of years. I remember our electrician telling us he was working as much as he could because he was anticipating that the housing market would cycle.

RONW said...

Kay- it would be less if you had waited mainly because a lot of 'investors' were renovating houses/apts just to turn them around and resell them on the market. Mainly kitchens and baths. So that took up a lot of carpenters by itself and whomever were available well weren't the best. But then their rates were on a take it or leave it basis. Union wise I was working 7 days a week 10 hours a day before the bottom fell through. Your electrician musta known something. We had no idea. And the length of this recession, that was unheard of. Btw, this is not a 'sorry' kind of trade for example when I worked 14-hr days with OT, temporarily last year, it amounted to $700 per day. Emphasis on the 'when.' The overall harm that the housing fraud did was the damage to the retirement funds for institutions that invested in mutual funds which had large holdings in mortgages. The S&P (whoever rating agency) gave the bogus mutual funds top rating knowing that this wasn't so.