What a Strong Servicer Settlement Looks Like

by Abigail Field

Many–including me–have attacked the idea of a multistate and federal settlement with the biggest bailed out banks (wearing their mortgage servicing hats) on the grounds that it’s wrong to settle something that hasn’t been thoroughly investigated. We’ve also objected by pointing out the numbers on the table are too small by at least a zero to make much of a difference to homeowners or the housing market as a whole. We’ve raised more specific objections too, like the scope of the liability release and concerns about enforcement since the banks have exactly zero credibility on deals they’ve previously inked on these issues.

But community groups and others have countered hey: homeowners need help now, and desperately, don’t make the perfect the enemy of the good. So here’s a guide to what “the good” would look like, at least from where I sit. (And here’s a hint; it looks nothing like what we’ve been told is on the table.)

1) Enforcement. Now, there’s been rumors about an independent court appointed monitor to do enforcement. That sounds fine as far as it goes, but here’s what real enforceability means:

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