The Miami Foreclosure Lawyer Blog previously wrote about a recent Bloomberg investigative piece that revealed the $1.2 trillion in secret loans that banks got in public cash without taxpayers even knowing about it.
Part Two of the Secret Bank Loans blog series looks at which banks got the money and how the Federal Reserve doled it out on the public’s dime. The third part of the series will investigate why the plan hasn’t worked to stop foreclosures in Miami and throughout the nation as well as why the public never knew.
Our Miami Foreclosure Defense Attorneys are committed to helping homeowners fight back against foreclosure and holding the banks accountable for their mistakes. They have taken billions in taxpayer dollars and yet have done nothing to help the borrowers who made them so much in profit when times were good.
The Bloomberg piece found that lending banks and other businesses received as much as $1.2 trillion in public money — about the equivalent of what is owed by U.S. homeowners who are in foreclosure — in order to keep them afloat. And the loans were kept secret from the public, until now.
Part Two of this series of blogs will detail which banks got money, how much and how the Federal Reserve determined who would get these public taxpayer dollars. The blog will also detail why the public never knew it was lending its money to the banks who have used robo-signing and shady tactics to take people’s homes away.
Here’s a look at the top ten companies in terms of the bailout and how much each company received in loans from the government, according to Bloomberg:
- Morgan Stanley: $107 Billion
- Citigroup: $99.5 Billion
- Bank of America: $91.4 Billion
- Royal Bank of Scotland Group: $84.5 Billion
- State Street Corp.: $77.8 Billion
- USB AG: $77.2 Billion
- Goldman Sachs Group Inc: $69 Billion
- JPMorgan Chase & Co.: $68.6 Billion
- Deutsche Bank AG: $66 Billion
- Barclays Plc: $64.9 Billion
That’s a staggering amount of money — $805.9 billion — for just ten companies to get from the government. Also amazing is the amount put into perspective. According to Bloomberg, the balance was more than 25 times when the government loaned out on Sept. 12, 2011, the day after terrorists attacked the country. That day, the government doled out $46 billion. In $1 bills, $1.2 trillion would fill 539 Olympic-size swimming pools.
Government officials told Bloomberg that the investment didn’t incur any losses. A February report states that the bank netted $13 billion in interest and fee income between 2007 and 2009.
While that may be true, the tactics used by the government — a supposed watchdog for the people’s money — were less-than-desirable. In most cases, the Fed would require collateral for its loans. Typically, that was treasuries or corporate bonds and mortgage bonds that would be seized if the borrower defaulted.
But as the crisis with banks got worse, the nation’s bank began taking “junk” bonds and stocks, which are the first to go during a liquidation. Junk bonds are those below investment grade and typically are the least desirable. The Fed also began making loans at a 1.1 percent interest rate, a third of what banks were charging in interest at the time.
So, the country’s national bank was giving out loans to banks, who, in turn, have pummeled the average homeowner. The Federal Reserve has done little to help Americans, whose tax dollars the bank used to help these private banks get by. The bottom line is the homeowner wasn’t protected then and he is not protected now.
But Miami Foreclosure Defense Lawyers are ready to fight by your side to point out the shady practices these banks have used in order to try to take hard-working people’s homes away from them. If you are in this situation, call today.
If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991.
More Blog Entries:
Banks Still Looking For a Break Even After Foreclosure Mess in Miami, Nation: August 3, 2011
Federal Housing Administration Concerned About Number and Severity of Enforcement on Miami Lenders: July 19, 2011
Wall Street Aristocracy Got $1.2 Trillion in Secret Loans, by Bradley Keoun and Phil Kuntz, Bloomberg