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“First of all, there isn’t a settlement. there are lots of talks and discussions going on and there will not be a settlement unless we are agreed that it is bringing meaningful change to the foreclosure problem” Cordray

TRANSCRIPT:

>>> new developments in the fight against fraudclosure. settlements now in the works. all 50 attorneys general negotiating deals. did i tell you, we bailed out gm because they were running financing scams? that’s off topic, but just reminded me. this in response of course to the massive probe of foreclosure practices launched in october. jpmorg jpmorgan, gm, all temporarily freezing foreclosures after admitting questionable foreclosure practices. those banks since resuming foreclosures. all receiving massive sub sidies from you to me. the key question now is will these settlements bring the reform we all know is so desperately needed and what about the people wrongly kicked out of their homes already even as the banks have no capacity? final tally not yet in, but 2010 on pace for a record number of foreclosures. joining us now is richard cordray. he’ll soon be headed to washington to take a new job and one of the most aggressive in trying to address the fairness, how consequential is this settlement?

>> first of all, there isn’t a settlement. there are lots of talks and discussions going on and there will not be a settlement unless we are agreed that it is bringing meaningful change to the foreclosure problem and loan modification process that we want to see advanced more effectively.

>> today, eve smith at naked capitalism said the petition with 12,000 signatures on it to tim geithner, ben bernanke, mary schapiro and others in washington asking for tougher regulation. how relevant are efforts like this, where people, they know what’s going on and that the federal government is enabling it. how relevant.

>> i think people in washington, people in columbus, ohio, need to hear from people about their real life situations. but their stories are so rampant now about the problems with the mortgage servicers, that we’re at the end of our patient ens and we want to see meaningful reform and the scandal has created significant exposure, so it gives us an opportunity to see if we can make the kind of change that we want to see that will help homeowners and our economy.

>> what would that look like?

>> like a mortgage process that is more practical. a conversation that leads to paperwork being submitted and processed properly, so the burden isn’t on the homeowner to chase and chase and get a conversation going, then find that the customer service is lacking on the other end of the phone. these are things basic in many industries, but the big mortgage servicers in the last decade have not got thon that point. this is an opportunity for us to see if we can get something done that moves the ball and helps people in this country.

>> you and i and most people in this country know that the primary concern — deprive other citizens of the country of their freedom of their — who own or basically giant real estate holding companies and while the politicians well tell us that every american owns a home, the whole truth of the matter is — control of the houses, already servicing banks. how do we reform this process without in some way reforming the consolidation of power at wells fargo, jpmorgan, citigroup, bank of america?

>> i think the row bow signing scandal poses a good test. there is an ongoing investigation by a number of people at the federal level in all 50 states attorneys general. we are going to try to call them to account and try to get these processes changed so that the flaws are going forward and sweeping existing flaws under the rug. there has to be change in their processes. meaningful compensation for people who have been harmed by the problems and the financial institutions i think recognize here they have created a major problem for themselves. a resolution is in the best interest of everyone, but it’s a matter of convincing them of that and that’s what we’re trying to do.

>> it’s not in their best interest. as you go to d.c., how should we evaluate your effectiveness in your new role?

>> i’m not there yet. i’m not authorized to speak to the bureau, but i would say the way you should register is are they making a difference for the individuals who are grappling with financial products that have often run amuck, have not served their interest and in many cases, the banks own interests once you begin to assess the damage done. i think it is in the bank’s best interest, otherwise, they face individual exposure, subject to the whims of tens of thousands of judges. i think they recognize the expotion, they created the problem for themselves, now, it’s time for us to get it cleaned up.

>> a real pleasure to get some time with you. thank

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