If you’re like most Americans, you probably know somebody who’s been through a foreclosure or has been victimized by dishonest mortgage practices. You’re far less likely to know someone who has experienced meaningful relief from a foreclosure fraud settlement. Why is that? Payments on those 9.1 million underwater mortgages are a form of wealth transfer from Main Street to Wall Street, as homeowners continue to overpay the bankers who inflated those mortgages in the first place – or risk losing their homes to them. If this added burden harms their credit score, they’ll pay banks more for other forms of borrowing as well. And yet, these settlements do not require banks to provide principal relief for these underwater homeowners. They don’t ask banks to return homes that they wrongfully took from their owners. They don’t ask banks to forfeit every penny of earnings received through forgery or perjury. They don’t even ask them to restore the credit ratings of defrauded customers. On a broader scale, these settlements don’t ask banks to invest in job creation, increase their lending to job-creating enterprises, or refrain from other forms of consumer fraud. Instead they’re limited to addressing a very limited set of harmful activities – and don’t even fully compensate victims for the harm those activities caused.
Posted on: Sun, 10 Aug 2014 16:45:52 +0000
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