Foreclosure Settlement

It is becoming more and more obvious that our government is working for the banks rather than for those homeowners who are struggling to simply contact the banks that are screwing them.  The banks' record-keeping ability must have been designed by first-graders and implemented by kindergarteners.  We've seen that Promontory Financial Group, a supposedly independent consultant in the mortgage settlement, was really not so independent. The latest shoe to drop was at a hearing of the Senate Banking Committee’s Subcommittee on Housing, Transportation and Community Development, which provided this exchange between Senator Jeff Merkley and Deborah Goldberg, Special Project Director of the National Fair Housing Alliance:

Senator Merkley: “In your testimony Ms. Goldberg, on page 10, you note that ‘on a loan with an unpaid balance of $500,000, a loan modification that provides any amount of principal reduction – be that $1,000, $10,000, or $100,000 – will yield $500,000 worth of credit for the servicer.’ It’s hard for anyone apart from this process to truly believe that if you do a $1,000 reduction you get $500,000 credit. Yet, are you saying absolutely that’s the way it works?” 

Ms. Goldberg: “That’s what it says in the settlement…”   

Senator Merkley: “Well, I’d just like to point out that the roughly $6 billion in soft money that’s in the settlement, at that 500 to 1 rate, that is reduced down to $12 million.  Six billion goes to $12 million. That’s a vast difference.

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