Reaction to the Foreclosure Fraud Settlement
You’ve heard enough from me. And actually, you’ll hear plenty more later. But I thought I’d line up what some other people are saying about the foreclosure fraud settlement, the terms of which have not yet totally been released (which, I repeat, is a travesty of justice).
First, let’s hear from our old friend ___ . (h/t Yves)
“This agreement addresses breakdowns in the mortgage servicing industry, and allow us to pursue other mortgage-related misconduct,” said ___.
“While this settlement includes significant relief for homeowners, it also puts in place new protections for homeowners in the form of mortgage servicing standards,” ___ said. “That’s not something we’d see if we simply won a money judgment in a trial.”
That’s part of a shell press release given (presumably by the feds) to state AGs. We’ll have to see if any of them actually use it.
Here are a couple actual AGs. New York’s Eric Schneiderman:
“Thanks to the advocacy and support of Americans across the country, we have preserved the right to continue investigating the misconduct that led to the bubble and crash of the housing market. For a year, the proposed settlement was simply inadequate, and I applaud all those who fought with us to hold banks accountable for their role in the foreclosure crisis, provide meaningful relief to struggling homeowners, and allow a full airing of the facts to ensure that abuses of this scale never happen again,” said Attorney General Schneiderman. “On multiple fronts, we will continue to investigate the mortgage crisis, and ensure that justice and accountability prevail.”
California’s Kamala Harris:
“California families will finally see substantial relief after experiencing so much pain from the mortgage crisis,” said Attorney General Harris. “Hundreds of thousands of homeowners will directly benefit from this California commitment.”
“This outcome is the result of an insistence that California receive a fair deal commensurate with the harm done here. We insisted on homeowner relief for Californians and demanded enforceability so homeowners actually see a benefit that will allow them to stay in their homes, and preserved our ability to investigate banker crime and predatory lending,” continued Harris.
Much more on this later; Harris claims she will get $18 billion out of this for the state.
Now some activist groups. PICO National Network:
Today’s announcement of a multi-state mortgage servicing settlement must be the first, not final, step towards a just resolution to the housing crisis.
“The deal announced today is too small. It falls far short of providing real justice for homeowners and American families. The estimated $17 billion for principal reduction is a small drop in a big bucket in comparison to $700 billion in total negative equity. The reported $1,800 restitution payment for those who already lost their homes is just a tiny fraction of the wealth stripped from so many families, especially families of color. That’s why PICO will continue to fight to ensure that the current deal is just a down payment on a much larger settlement that does justice for American homeowners harmed by the big banks’ criminal activity.
Campaign for a Fair Settlement, a coalition of various organizations (and this one is kind of appalling):
“While we have always believed that a full investigation of banks should precede any deal, this foreclosure deal accomplishes our central goal: severely limiting legal immunity for banks so multiple investigations into the role of banks in crashing the economy and housing market can proceed unimpeded […]
“Positive terms of the deal include:
1. Limiting legal immunity to banks to narrow robo-signing issues, paving the way for multiple investigations of the residential mortgage backed securities market.
2. No waiver of claims by the state of New York in the lawsuit announced last week over the Mortgage Electronic Registration Systems (MERS) by Attorney General Eric Schneiderman
3. Homeowners retain their rights of action against banks and servicers, now with $2.7 billion in guaranteed money to states for home counseling, legal and foreclosure services.
4. A down payment toward mortgage relief to homeowners in state impacted by the foreclosure crisis for refinancing, loan modifications and principal reduction.
Homeowners could never have their rights of action stripped by Attorneys General.
Robert Borosage of the Campaign for America’s Future:
The bank settlement of $25 billion over three years from five major banks for robo-signing forgeries is being hailed in Washington and scoured by leading bank critics.
I’m reminded of Groucho Marx who said upon being invited to join a country club: ‘I wouldn’t want to belong to any club that would have me.’ Similarly, it is hard not to be suspicious of any deal that the banks would sign.
It gets a relatively small sum from the banks in exchange for limited immunity on their flagrantly illegal robo-signing – or forgery – of mortgage documents. The money will provide homeowners with the possibility of real legal assistance and small amounts of relief. No private rights of action have been waived. The suit brought by Schneiderman on MERS – the bank creation that simply trampled hundreds of years of property laws – continues – and other state Attorneys General should follow suit. Schneiderman now co-chairs a federal task force charged with doing a real investigation that could result in a serious settlement.
The deal has been cut before the investigation so it is suspect on its face, but limited in its scope. Whether it will be enforced adequately remains to be seen. How homeowners benefit will differ from state to state.
The real question isn’t this ante. The real question is whether the federal investigation will finally turn over all the cards so we know just how bad a hand the banks are holding. Only then is there a possibility for real accountability – and real relief for homeowners.
The New Bottom Line:
The mortgage fraud settlement being announced today is a tiny drop in a big bucket. It does not do justice for the millions of homeowners who lost their homes or hold the banks fully accountable for their crimes. For homeowners who were defrauded and lost their homes, $2,000 is too little, too late. It is a paltry down payment toward full relief for homeowners.
Despite its flaws, the settlement announced today is stronger than it would have otherwise been because of grassroots groups and the courageous stance of Attorneys General from California, New York, Nevada, Delaware, and Massachusetts, who fought hard to bring more relief to homeowners and make sure that any settlement does not allow the banks to avoid accountability for fraudulent activity not yet investigated. Due to their work and the work of many allies, momentum is building toward broad-scale relief for homeowners.
Philip Robinson at Civil Justice, from Loren Berlin’s story:
Those who already lost their home, however, would receive just the smallest fraction of the money: a one-time cash payment of about $1,800 as compensation. Their entire lives have been turned upside down and changed,” said Philip Robinson, the acting executive director of Civil Justice, a Baltimore-based nonprofit that has worked with thousands of Maryland families fighting for their homes. “Does $1,800 sound fair? Does that seem like compensation for a financial and emotional tragedy?”
And foreclosure defense attorney Margery Golant:
“Compared to what these [banks] literally stole, it’s just eyewash,” said Margery Golant, a Florida-based attorney who represents homeowners and formerly served as assistant general counsel at subprime mortgage giant Ocwen Financial. “These are such serious crimes and for everybody to get a pass like this, it just encourages them to think that they always will.”
More when I see them.