Half Of Bank Pay Could Modify Every Underwater Mortgage

Wall Street banks are on pace to pay out some $143 billion in compensation for 2010, just shy of their record year of 2007. But given the widespread layoffs of mid-level employees as a result of the financial crisis, average compensation set a record. At the top six banks, compensation rose 10 percent over 2007.

By spending just half of that money elsewhere, the banks could modify the loans of every homeowner with an underwater mortgage, cutting principal and interest rates down to the current market value, according to a new report by critics of excessive compensation.

The $143-billion figure represents total compensation, including salaries for secretaries and entry-level employees as well as mammoth senior-level bonuses. But salaries for lower-level financial employees have largely flatlined in recent years as executive compensation has soared. Compensation for bank tellers, for example, has risen a meager 5 percent in real terms since 1999, according to the Bureau of Labor Statistics.

The report, compiled by a coalition of groups that includes the Service Employees International Union, notes that the compensation could buy health insurance plans for two-thirds of the uninsured.

The figure represents total compensation, not simply year-end bonuses, but even half of the compensation could cover a third of the uninsured.

Bonus season comes as Congress is pushing through a tax-cut deal that will allow the wealthy to inherit up to $5 million tax-free, while lowering taxes on additional inheritance. It also extends the Bush-era tax cuts for the wealthy for two years.

A small tax on financial transactions would effectively reduce compensation and bonuses, while cutting the federal deficit and reducing financial speculation, but the fee -- known as a "Tobin tax" -- is barely under consideration in Washington.

Comments

[Siebenstein]

04:02 AM on 12/28/2010

Psychopaths always sleep well, regardless of their actions.
Today, most of them come in suits and k1II with paperwork.

[Cat Fish]

12:28 AM on 12/19/2010

How can these guys even sleep at night ? The to TBTF made all these bad loans and were financially worse off then the people they loaned money to. Now these Banks don't have to disclose the real market value of there assets, so who knows if they are even making money right now. The Captine of the Titanic went down with the ship they did not take all the life preservers for themselves, but when the Banks went down they gave them self's huge BONUSES WTF, You would think our GOV would require clawbacks, But Noooo You would think Fox news and the rest of the MSM would bring this up. Maybe !!!

[bynddrvn5]

06:24 AM on 12/17/2010

For these Wall Street salaries to be justified we would need to see some serious skills, like walking on water, curing illness by touch, or something similar.

I haven't seen anything too spectacula­r coming out of Wall Street lately, in fact I would have to mark the performanc­e as: "Needs Serious Improvemen­t."

[Chris Moltisanti]

03:40 PM on 12/16/2010

they have officially changed the slogan AMERICAN DREAM to AMERICAN ME....

this country is all about ME...there is no concept of society any more...

they had intended it with the constitution and started it off "WE the people..."...

but in between the lines it reads "ME the person..." for most...

the bourgeoisie and oppression that the founding fathers have come here to escape became the very country we live in....same thing...

[mjtaylor22]

03:03 PM on 12/16/2010

and conservatives held unemployment hostage so that thes bumbs could continue their favorable tax breaks.....
..same bumbs we bailed out....took the money and ran, instead of investign in our nationthat made them wealthy and saved their bacon.....
Capitalism at its best i tell ya.............(thanks sucker)

[Chris Moltisanti]

12:45 PM on 12/16/2010

@harveyr2...this is a repost, i couldn't find my comment and wasn't sure if it posted -

thats not what i meant and you know it. on wall street they speculate on completely healthy companies with no loss, and "bet" that they will lose, then when companies lose value, wall street makes money off of them. it is the exact same thing as the "Dont' pass" line on a craps table. they quite literally bet that other currently successful people will fail.

and anyone can short a stock, i know how to do it, but when i do it i do it with my own money. when wall street and banking does it they do it with other peoples money or even worse, they do it with the tax payer dollars without any consequenc es if they lose the money and cant pay it back.

you sound like a poster for everything that has gone wrong down there and continue to speak in past slogans and non sequiturs without actually discussing any of what specifical ly has been proven to have gone on down there with banking and wall street over the past two years.

[Miniblue]

10:55 AM on 12/16/2010

So what can we do about it? Lets do something! PULL YOUR MONEY OUT OF THE BANKS NOW!

[Siebenstein]

04:03 AM on 12/28/2010

Did already, moved it to a credit union.

[Kyle Ransom]

09:43 AM on 12/16/2010

I think across to board from big companies to the Feds money has made replace fiscal responsibility for GREED.

Kyle Ransom
http://gofightforeclosure.com

[Vendetta101]

09:28 AM on 12/16/2010

When we open our eyes to this this oppression and theft of the American peoples treasure they will be hunted down throughout the world like the Nazi's after WW2

[nanimal]

09:27 AM on 12/16/2010

But the greedy bastards need their multi-million dollar bonuses! The rich don't need us anymore, they have emerging markets in India and China to concentrate on...so screw the American people they already sucked us dry!

[Tierce]

09:10 AM on 12/16/2010

So much for the trickle down theory. At least here in America. It is working in other countries where the jobs that once were here have been outsourced to. As long as this country allows companies to outsource to sweatshops(which is illegal in the US and hypocritical of those who claim to be American) our economy will continue to diminish and only the wealthy will be able to afford to live here plus a few serfs. The rest will be rounded up and thrown in jails or executed. The new world order is here.

[floodmfx]

08:29 AM on 12/16/2010

So, we could save all these home-owners for $71.5 billion !?!

That is 6 months of the Iraq War.
That is 75% of Goldman Sachs recent bonus announcement.
That is less than 10% of the US military budget.

We could cut the military budget by 10%,
and save Main St.

But the Politicians only want to save Wall St.
That came up with Trillions to save Wall St.
But there is no way they will find 71 billion to to save Main St

[USNDC]

08:26 AM on 12/16/2010

Banksters sell $70,000,000,000,000 of worthless crdit default swaps insurance policies to entice investors to purchase their mortgage backed securities.

Banksters avoid calling them insurance policies ... in order to evade insurance industry regulation ... including capital reserve requirements ... necessary to pay claims.

Economy goes south ... unemployment goes north ... foreclosures increase ... Investors file claims against their credit default swaps ... but wait ... the Banksters hadn't set asid any monies to pay the claims !

The result ... the BAILOUT.

The Banksters engineer, orchestrate, and execute the largest financial crime ever ... and didn't get punished ... they got bailed out.

The Banksters should be punished ... and should take a haircut over this issue.

The Banksters should be forced to fix what they broke.

What happens next ? ... Investors that purchase the Banksters worthless

[Veri]

07:44 AM on 12/16/2010

People have to realize that it is not in the best interest of banks and banksters to modify those mortgages. As soon as people realize that other people are not like them, may not be as good as others think them to be, and stop believing that people will do the right thing...

That these people are not altruistic... that these people simply do not give a flying f**k about doing the right or necessary thing... That they care about themselves and THEIR friends. That they know only those they work and cavort with.

Well...

Then this disaster might be fixed.

Prime example, when people where asked why the voted for George Bush, the most common reply was, "He seems to be an average guy."

As if an average guy would endorse torture, lie about WMDs to commit a war crime by illegally invading the wrong country, declaring an Axis of Evil when there was none, encourage Americans to spy on one another (Soviet Union?), etc...

You are lice. You are dirt. You may care about your neighbor. But you do not live on Global Wall Street.

This is human economic nature.

[lcr999]

01:52 AM on 12/16/2010

I agree there is excessive pay...but...

you just don't get it. For the most part, it is not the banks that own the mortgages. It is not their decision to forgive and forget. The mortgages are part of securities that are owned by all sorts of institutions including your pension fund and your insurance company. That is part of the problem. It is not easy to unwind the whole mess, even if there was the will on the part of some of the parties.

When our life insurance policy turns out to be worthless, and your pension fund takes another hit, you will be less generous in having the banks give away your money.

[Veri]

12:28 PM on 12/16/2010

The banks screwed the process... the lost the paperwork required by law and/or courts. For the past few hundred years, they followed those procedures. Then for desire of Mo' Money, the deliberately set out to circumvent those procedures.

They lost the paperwork. The paperwork that is the only document for proof of ownership. Not other documents will do. Now, they forge the paperwork. Now, multiple banks foreclose on one property, or property not even under mortgage, because they have screwed up.

The banks committed massive fraud. The CDS were rated AAA by their collaborators in the ratings agencies. The government regulators turned a blind eye. The Fed, a privately owned corporation, printed the money. Banks approved loans they should not have, all in the pursuit of bonuses.

Without the approval of those loans, only done so by the banks, their would be no disaster. Even the mortgage applicant should not have taken that loan. HOWEVER, without bank approval, this would not have happened.

The sole responsibility, WHERE the buck stops... is at the bank. The knowingly made bad loans. They knowingly pimped out the loans as AAA investment. The knowingly screwed the paperwork. The most guilty are the banks.

And yet, the least guilty are punished for the perpetual fraud of the banks. By continuing this fraud, we only postpone the day of reckoning. The longer we wait, the worse it will be. And, the day of reckoning means punishing those most guilty.

Get the picture?

[lcr999]

08:37 PM on 12/17/2010

I agree the banks have acted in bad faith, even criminally. And yes some people should be going to jail.

But that still does not give the banks the power to modify loans that they no longer own.