$8.5 Billion Agreement with Mortgage Servicers Fails to Bring Economic Justice
The recent joint announcement by two key federal regulators believed a negotiated agreement with 10 mortgage servicing firms would help more than 3.8 million consumers who were wrongfully foreclosed during 2009 and 2010. Brokered by the Federal Reserve and the Office of the Comptroller of the Currency (OCC), mortgage servicing firms agreed to jointly pay foreclosed consumers $3.3 billion, and allot another $5.2 billion for loan modifications and other services.
Yet as news of the settlement spread, a range of opinions emerged. From a prominent Capitol Hill legislator to consumer advocates, varying views spoke about the harm wrought by wrongful foreclosures and how far $3.3 billion split amount nearly 4 million consumers would really go.
Rep. Elijah Cummings (D-Md.), ranking member of the House Committee on Oversight and Government Reform, said: “I do not know what the rush was to make this settlement without answering key questions, and although I look forward to obtaining information about how this deal may assist homeowners, I have serious concerns that this settlement may allow banks to skirt what they owe and sweep past abuses under the rug without determining the full harm borrowers have suffered.”