A Foreclosure Problem Congress Couldn’t Ignore

After a news report showed banks were improperly foreclosing on members of the military, the companies are scrambling to fix the problems and camo-wash their images.

Some excerpts from the report…

Yet that’s what the entire mortgage industry is doing. And the reason for it is simple. The banks know that the military is one of the only widely respected institutions left in the country, and well-publicized instances of abuse of service members will cause a far bigger backlash than they have experienced to this point. What’s more, evidence of wrongful foreclosures on the military will lead to further scrutiny of their actions with other borrowers.

This is what you could call “camo-washing,” similar to the greenwashing that corporations employ to create an appearance of attentiveness to environmental issues. The banks bend over backwards for the benefit of members of the military they have wronged, to distract from the fact that they’re not doing the same for millions of others. It also works to enhance their public image, positioning them as sympathetic and responsible, willing to make good when they screw up.

But the logic is lacking. Banks are fighting any settlement to the foreclosure fraud scandal that forces them to pay penalties to their borrowers. But they’re showering service members with money and free homes. All the attention and care paid to military foreclosures simply underscores the fact that next to nothing is being done with all the wrongful foreclosures on everyone else. Almost three million families will get a foreclosure notice this year, just about the same number as last year and in 2009. But the banks are focusing on a small handful of military foreclosures.

Nobody denies that foreclosing on members of the military while they serve overseas is particularly egregious. But hardworking civilians duped into loans, ravaged by an economic meltdown and stonewalled in their effort to save their homes are not somehow less deserving than the men and women on the front lines.

Check out the article in full here…

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