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AG Settlement Still Allows for Investigations

FOR IMMEDIATE RELEASE

February 8, 2012

CONTACT:  Pat McCoy – pat@actionnc.org – 919-883-7120

 

Banks Still Open to Investigation Under State AG’s Settlement

$26 Billion Deal Limits Legal Immunity for Banks, Strengthen Enforcement, Improve Benefits for Homeowners

Raleigh, NC – Under the terms of a new deal struck by states’ Attorneys General, new investigations by federal and state authorities will be permitted and should help win much larger program to reset mortgages to fair market value and fix the economy, while also providing over $1.5b in direct restitution right now. Action NC, a state partner of The Campaign for a Fair Settlement, a coalition of progressive organizations nationally and in states hard hit by the foreclosure crisis working to hold banks accountable for their role in the foreclosure crisis, applaud this historic effort.

“While this settlement may be not perfect, we feel it is a net positive for the millions of people illegally preyed upon by banks through the state and country,” said Action NC Executive Director Pat McCoy. “We have always believed that a full investigation of banks should precede any deal, but this foreclosure deal accomplishes our central goal: severely limiting legal immunity for banks so multiple investigations into the role of banks in crashing the economy and housing market can proceed unimpeded.”

A full and unfettered investigation that exposes the true scope of fraudulent and criminal practices by big banks in creating the mortgage mess is the only way to win justice for the harm caused in the economic crisis and to win a plan to help all homeowners by resetting mortgages to fair market value on a scale that approaches the $700 billion in negative home equity created by the banks.

Progressive groups nationwide are uniting in an unprecedented campaign to fix the economy for middle class homeowners by winning a program to reset mortgages to fair market value that is significantly larger than the relief in this deal.

While the settlement is imperfect and key details have not yet come to light, the terms are greatly improved thanks to the leadership of Attorney General Eric Schneiderman of New York, along with Attorneys General Kamala Harris of California, Catherine Cortez-Masto of Nevada, Beau Biden of Delaware, Martha Coakley of Massachusetts, Lori Swanson of Minnesota. Because of their strong efforts to stand up to Wall Street on behalf of homeowners in their states, and because of the efforts of progressive organizations nationwide,  there is no question that this is a better deal for homeowners and taxpayers today than when negotiations began.

Positive terms of the deal include:

  • Limiting legal immunity to banks to narrow robo-signing issues, paving the way for multiple investigations of the residential mortgage backed securities market.
  • No waiver of claims by the state of New York in the lawsuit announced last week over the Mortgage Electronic Registration Systems (MERS) by Attorney General Eric Schneiderman
  • Homeowners retain their rights of action against banks and servicers, now with $2.7 billion in guaranteed money to states for home counseling, legal and foreclosure services.
  • A down payment toward mortgage relief to homeowners in state impacted by the foreclosure crisis for refinancing, loan modifications and principal reduction.

Concerns with the deal

The deal contains several troubling provisions:

  • It provides only $1.5 billion in restitution for victims of foreclosure. While this money will provide some help to some homeowners, this amount is not nearly enough to compensate homeowners for their losses caused by the irresponsible and predatory behavior of Wall Street banks.
  • The enforcement provisions, while strengthened by the appointment of a federal monitor, remain murky at best. We are committed to holding the banks accountable to this deal and will demand significant penalties for banks that fail to comply.

Action NC is a grassroots community organization that empowers low to moderate-income communities to take action and win victories on issues of concern to our communities. The Campaign for a Fair Settlement is a coalition of progressive organizations nationally and in states hit hardest by the foreclosure crisis working to hold banks accountable for their role in the foreclosure crisis, and protect homeowners and taxpayers.