The more than $25 billion settlement reached Thursday with the nation’s five largest lenders involved in the mortgage meltdown is being celebrated and criticized.
After the Feb. 9 announcement, state Rep. Camille Lilly and South Austin Community Coalition’s Elce Redmond released statements to the public offering very different views about the second-largest settlement reached through numerous state attorneys general.
Lilly is applauding the agreement made with Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial (formerly GMAC) that will provide $1 billion in assistance to those affected in Illinois.
“It’s about time that the big banks that got us into this economic crisis are held accountable,” Lilly said in a press release.
“Now we must make sure that the settlement dollars are put to good use, keeping families in their homes and allowing homeowners more time to make their house payments,” she said.
But Redmond has a different view.
“The mortgage fraud settlement being announced today is a tiny drop in a big bucket,” Redmond said in his press release.
The settlement will provide up to $2,000 in restitution to eligible borrowers who lost their homes between 2008 and Dec. 31, 2011. There is also assistance for those facing foreclosure right now and help for homeowners current on their payments but unable to refinance because they owe more on their home than it’s worth.
“It does not do justice for the millions of homeowners who lost their homes or hold the banks fully accountable for their crimes,” Redmon said.
“For homeowners who were defrauded and lost their homes, $2,000 is too little, too late. It is a paltry down payment toward full relief for homeowners,” he said.
But Redmond said it’s at least a step in the right direction.
“Despite its flaws, the settlement announced today is stronger than it would have otherwise been because of grassroots groups and the courageous stance of attorneys general from New York, California, Nevada, Delaware and Massachusetts, who fought hard to bring more relief to homeowners and make sure that any settlement does not allow the banks to avoid accountability for fraudulent activity not yet investigated.
“Due to their work and the work of many allies, momentum is building toward broad-scale relief for homeowners,” he said.
Lilly agrees more work still needs to be done.
“To save our neighborhoods from devastating home foreclosures that bring down property values and destroy neighborhoods, we need further reforms to crack down on predatory lenders and big banks that take advantage of local residents,” Lilly said.
“We must use the momentum from this court decision to move Illinois forward and change overall standards to prevent future abuses,” she said.
You can visit Illinois Attorney General Lisa Madigan’s web site for more information and determine if you’re eligible for restitution or assistance.
Photo by Barb Duckett
The penalties imposed on banks is small. They will just figure out other ways to exploit customers through fees. $2,000 is insignificant to someone who’s home was a life-time investment. How do you recuperate from such a devastating lost? Why aren’t the attorneys being held accountable? They were present at the closing – transaction. Why didn’t detect discriminatory practices or detect discrepancies in the lending documentation. After all, weren’t the attorneys supposed to be acting in the best interests of their clients? Perhaps, Lisa Madigan and the Attorney Registration for Disciplinary Commission needs to investigate attorneys and law firms involved real estate practices.