Former Secretary of HUD Henry Cisneros: The Nation Underestimated Impact of Foreclosure Crisis
A former Secretary of Housing and Urban Development, Henry Cisneros believes the banking sector has not done all they could in the foreclosure crisis
The debate over the real estate bubble and the consequential foreclosure wave that swept the nation has been reinstated as regulators announced an $8.5 billion bank settlement with 10 major banks led by regulators of the Office of the Comptroller of the Currency.
Adducing that the review process was too costly—an estimated $1.5 billion has been paid to consultants and third party reviewers—and it was taking too much time—the review has been ongoing for over a year. Regulators decided to stop the investigation and spread $3.3 billion among 3.8 million homeowners. The balance will help with loan modification programs to homeowners still underwater or struggling with payments.
“It is unfortunate that this settlement is about abuses that occurred in the recovery process but it is not part of the long term solution. It was a necessary step but not a great contribution to solve the problem of foreclosures,” Henry Cisneros, former Secretary of Housing and Urban Development and former Mayor of San Antonio, Texas, told VOXXI.
Cisneros believes the entire nation underestimated the impact of the foreclosure crisis in the overall economic recovery process not only zapping consumer confidence but also leaving homeowners threatened by foreclosures hanging from the banking and financial sector.