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Merkley to Obama: Address the Foreclosure Crisis at the State of the Union

(Photo Illustration: Lance Page/truthout; Adapted From: woodleywonderworks/Flickr)

I understand that the President is riding high, with his poll numbers rising in conjunction with the public’s outlook for the economy. But all of that could easily come crashing down with a bank meltdown precipitated by the foreclosure fraud crisis. The damage to the rule of law and due process aside, the economy will suffer significant damage, providing a lasting drag on recovery, if housing prices keep falling, if foreclosures keep rising, if zombie banks keep zealously protecting their fictional balance sheets through illegal activities.

But nobody wants to talk about this; they don’t want to acknowledge the problem lest they have to solve it. The entire aforementioned NBC/WSJ poll had a grand total of zero questions about foreclosures. It’s simply a forgotten issue.

Among the few people in Washington willing to bring up this inconvenient crisis is Sen. Jeff Merkley. He unveiled an actual plan for fixing the mortgage market Tuesday, and today he writes a letter to the President, pleading with him to wake up and acknowledge the robo-signed, improperly-conveyed-to-the-trust elephant in the room. He wants the President to use the State of the Union to restart this conversation. Here’s the key graf:

A record one million families lost their home to foreclosure last year. Each of these foreclosures has damaged a family, set back a community, and chipped away at an already weak national economy. Few would argue that the housing crisis was the root cause of the collapse in our financial markets and the resulting economic recession. Although we have begun the process of reforming the financial system and restoring access to credit for small businesses, as long as families continue to lose their homes by the hundreds of thousands, even the most inspired economic policies will likely fall short.

The need to address the foreclosure crisis should spark in the President nothing so much as self-preservation. A recovery-stunting crisis will have major implications for 2012.

Merkley in the letter reiterates his six-point plan to fix the housing mess. Interestingly, a couple of them match up with what Sheila Bair presented to the Mortgage Bankers Association yesterday as a reform for the servicing industry: a single point of contact at the servicers for borrowers to deal with, for example, and an independent third-party review of servicer decisions prior to foreclosure. As Merkley rightly points out, a number of his ideas could be implemented by the President without Congressional action, though he will offer legislation on these ideas soon. [cont’d.]

However, while Bair is determined in her effort, seeing the Treasury Department actually praise mortgage servicers, by this point exposed as a completely fraudulent enterprise, shows the lack of attention paid to this crisis. It’s repugnant that a taxpayer-funded official of the US government said this:

Cindy Gertz, director of operations at the Treasury Department’s Homeownership Preservation Office, said mortgage servicers–firms which collect loan payments–have hired tens of thousands of extra staff to work with a crush of struggling borrowers who are trying to renegotiate the terms of their mortgages.

“I think tremendous progress has been made,” Gertz told a group of bankers at a conference organized by the Mortgage Bankers Association.

The industry Cindy Gertz praised has kicked Americans out of their homes without cause, used falsified and backdated documents to do so, broken into occupied homes and changed the locks, added illegal and unjustified fees, deliberately pushed homeowners current on their payments into foreclosure and basically done whatever they wanted in total violation of the rule of law. This earns them a gold star from Tim Geithner’s Treasury Department.

You know Treasury’s prime directive is to protect the banks. You’d think the President’s prime directive would be to protect himself. Merkley is offering him a path to that self-protection; as he writes, “if you make the restoration of the housing market and the economic growth it supports a top priority for your Administration and Congress, I believe you will touch the hearts and minds of millions of Americans who are worried not only about keeping their homes but also about building their futures.”

The whole letter is here.

CommunityThe Bullpen

Merkley to Obama: Address the Foreclosure Crisis at the State of the Union

I understand that the President is riding high, with his poll numbers rising in conjunction with the public’s outlook for the economy. But all of that could easily come crashing down with a bank meltdown precipitated by the foreclosure fraud crisis. The damage to the rule of law and due process aside, the economy will suffer significant damage, providing a lasting drag on recovery, if housing prices keep falling, if foreclosures keep rising, if zombie banks keep zealously protecting their fictional balance sheets through illegal activities.

But nobody wants to talk about this; they don’t want to acknowledge the problem lest they have to solve it. The entire aforementioned NBC/WSJ poll had a grand total of zero questions about foreclosures. It’s simply a forgotten issue.

Among the few people in Washington willing to bring up this inconvenient crisis is Sen. Jeff Merkley. He unveiled an actual plan for fixing the mortgage market Tuesday, and today he writes a letter to the President, pleading with him to wake up and acknowledge the robo-signed, improperly-conveyed-to-the-trust elephant in the room. He wants the President to use the State of the Union to restart this conversation. Here’s the key graf:

A record one million families lost their home to foreclosure last year. Each of these foreclosures has damaged a family, set back a community, and chipped away at an already weak national economy. Few would argue that the housing crisis was the root cause of the collapse in our financial markets and the resulting economic recession. Although we have begun the process of reforming the financial system and restoring access to credit for small businesses, as long as families continue to lose their homes by the hundreds of thousands, even the most inspired economic policies will likely fall short.

The need to address the foreclosure crisis should spark in the President nothing so much as self-preservation. A recovery-stunting crisis will have major implications for 2012.

Merkley in the letter reiterates his six-point plan to fix the housing mess. Interestingly, a couple of them match up with what Sheila Bair presented to the Mortgage Bankers Association yesterday as a reform for the servicing industry: a single point of contact at the servicers for borrowers to deal with, for example, and an independent third-party review of servicer decisions prior to foreclosure. As Merkley rightly points out, a number of his ideas could be implemented by the President without Congressional action, though he will offer legislation on these ideas soon.

However, while Bair is determined in her effort, seeing the Treasury Department actually praise mortgage servicers, by this point exposed as a completely fraudulent enterprise, shows the lack of attention paid to this crisis. It’s repugnant that a taxpayer-funded official of the US government said this:

Cindy Gertz, director of operations at the Treasury Department’s Homeownership Preservation Office, said mortgage servicers–firms which collect loan payments–have hired tens of thousands of extra staff to work with a crush of struggling borrowers who are trying to renegotiate the terms of their mortgages.

“I think tremendous progress has been made,” Gertz told a group of bankers at a conference organized by the Mortgage Bankers Association.

The industry Cindy Gertz praised has kicked Americans out of their homes without cause, used falsified and backdated documents to do so, broken into occupied homes and changed the locks, added illegal and unjustified fees, deliberately pushed homeowners current on their payments into foreclosure and basically done whatever they wanted in total violation of the rule of law. This earns them a gold star from Tim Geithner’s Treasury Department.

You know Treasury’s prime directive is to protect the banks. You’d think the President’s prime directive would be to protect himself. Merkley is offering him a path to that self-protection; as he writes, “if you make the restoration of the housing market and the economic growth it supports a top priority for your Administration and Congress, I believe you will touch the hearts and minds of millions of Americans who are worried not only about keeping their homes but also about building their futures.”

The whole letter is here.

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David Dayen

David Dayen