Expected 14-bank ‘settlement’ – a bailout in disguise
Newark, NJ – Another mortgage ‘settlement’ between the government and 14 Wall Street banks is being pulled out of the hat. The little that the ‘settlement’ does for homeowners is on terms set by the banks. A few objections, among others, are:
• People who have already lost their homes would supposedly be compensated $3.75 billion. It might sound like a lot but it is peanuts. If the banks really had to pay up for predatory lending, about $1 trillion in homeowner compensation would be a good start.
• In return for this puny cost-of-doing-business expense, the government will end efforts to hold lenders responsible for paperwork abuses like improper accounting of payments and excessive fees.
• The money would go to reduce payments for people who could then stay in their homes. That is, banks will reduce a few mortgages and avoid foreclosure losses. It is a write-off of money the banks would lose anyway. This way the banks get to keep something. The ‘settlement’ is only the latest bank bailout in disguise.
• The ‘settlement’ will end a review of 4 million mortgages ordered in 2011 by the Office of the Comptroller of the Currency, a division of the Treasury Department. The banks paid the expenses of the review, which meant they could do things their own way. Now the review is ending because the banks say it is too expensive.
The lesson, as so many times before, is that distressed homeowners must join together to find their own solutions. They must end their personal isolation. The Coalition to Save Our Homes, the People’s Organization for Progress, and many other community and labor organizations have worked with distressed homeowners. We have marched and protested at bank locations, exposing the real culprits in the mortgage bubble. We demand a hearing for homeowners by the New Jersey Attorney General. We demand a federal criminal investigation of Wall Street's wrongdoing in the mortgage bubble.
Last year many people banded together and stopped a foreclosure eviction in Orange of Susie Johnson, forcing mighty JP Morgan Chase to admit it held no financial interest in her home. We recently brought a strong turnout to a New Jersey Appeals Court hearing of a case that highlights everything that is wrong with the judicial process in foreclosure.
United struggle is the right path for distressed homeowners to follow, not dependence on treacherous government programs. The power of the people is not just a fine-sounding ideal. It is a real force in the world, the only one the vast majority of the people can depend on.