Proposed AG Settlement Helps Big Banks, Hurts Homeowners
The New Bottom Line Warns Obama Administration Against Giving Public a “False Sense of Confidence” that Foreclosure Crisis has been Addressed, Calls for Game-Changing Settlement
In response to the recent media reports that state Attorneys General are close to reaching a settlement with big banks on the foreclosure fraud scandal, The New Bottom Line has written an open letter to the Obama Administration and 50 state Attorneys General.
“The American people want and need a settlement that will be a game-changer. The current draft of the settlement as reported in the media does not meet this standard. It lets the banks off the hook for too much while providing too little for homeowners in return. And it fails to ensure that the banks direct relief to the people who they harmed the most,” said Rev. Lucy Kolin, of Oakland Community Organizations a PICO National Network affiliate and organizational member of The New Bottom Line.
“The settlement, in its current proposed state, would leave out 50% to 60% of homeowners whose loans are owned or guaranteed by Fannie Mae, Freddie Mac or the Federal Housing Administration,” added Judy Lonning from Iowa Citizens for Community Improvement, an affiliate of National People’s Action and an organizational member of The New Bottom Line. “We don’t want a settlement that gives the American people a false sense of promise that the foreclosure crisis has been addressed. That’s why we are pressing the Obama Administration to do what’s fair and right to help millions of homeowners, reset the housing market and go a long way towards rebuilding our economy.”
The open letter outlines The New Bottom Line’s four main concerns of the current proposed settlement and details 5 major components of what a successful settlement would look like, including,
1. No release of claims beyond the very specific conduct that has been investigated.
2. Restitution for families who have already lost their homes in this abusive, criminal and fraudulent system.
3. A complete overhaul and reform of industry servicing practices.
4. Strict, independent and robust enforcement and accountability of all parts of the settlement, including detailed reporting on compliance by race and census tract.
5. Widespread and fairly applied principal reductions, especially in communities hardest-hit by the crisis.
Copy of letter below…