Kamala Harris Celebrates Her Role in the Mortgage Crisis Settlement. The Reality Is Quite Different
Pretty much every major Democratic official involved in responding to the foreclosure crisis during the Obama years did an unforgivably terrible job. That’s how we wound up with 10 million families losing their homes, an unprecedented disaster that touched every corner of America and triggered the populist backlash we’re living through today.
There isn’t a particular individual to single out and blame for the party’s failure, and that’s not what this story is doing. Kamala Harris’s role in the affair was no more or less tragic than anyone else’s. But now that she’s running for president, Harris is not only eliding responsibility for her part in the failure, but claiming it as an outright success. That claim doesn’t withstand a moment’s scrutiny.
“We went after the five biggest banks in the United States. We won $20 billion together,” Harris said in her initial campaign address in Oakland, California. She has highlighted the settlement for years as an example of her record of taking on powerful interests.
Harris is referring to the national mortgage settlement, a massive deal made with Bank of America, Wells Fargo, JPMorgan Chase, Citigroup, and Ally Bank (formerly known as GMAC) in 2012, when she served as California attorney general. And that settlement is best understood as a second bank bailout, protecting legally exposed mortgage fraudsters while doing little to prevent evictions. In fact, more families lost their homes as a result of transactions facilitated by the national mortgage settlement than those who got a sustainable loan modification to save them.
Equating a toothless settlement with a sufficient penalty for criminal fraud sets a meager baseline for what constitutes punishment, virtually ensuring subsequent crimes. If we will ever dismantle a system that delivers one set of laws for the powerful and another for everybody else, we must be honest about the glaring inadequacies of the past. Harris often uses the phrase “let’s speak that truth” as a throat-clearer in speeches. Well, let’s speak some truth about the national mortgage settlement.
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