Below the Fold: Where did the $26 Billion go?

. . .

 

..

You can pause intro music down below.

Below the Fold: Where did the $26 Billion go?

.

Piggybankblog posted on 09/14/12

Cross linked with huffingtonpost.com

.

A wrap-up of stories and posts you might have missed or overlooked — the ones below the fold.

You may remember some hubbub back in February about some talks involving a $26 billion settlement that was supposed to provide relief to nearly two million American homeowners. Many homeowner activists, bloggers, and homeowners themselves saw the settlement is nothing more than another giveaway to placate the banks and servicers. It’s starting to look as though they were right.

Despite the warnings, outrage, and in some cases pleading, some of the biggest voices in the consumer advocacy community touted the settlement as a positive thing for homeowners.

AFL-CIO President Richard Trumka said:

“The banks broke the law by railroading homeowners through the foreclosure process. Today’s settlement provides compensation for foreclosure victims without requiring individuals to waive their legal claims. While banks must be made to pay more to help homeowners, the settlement includes needed principal write-downs so homeowners can stay in their homes.”

Alys Cohen of the National Consumer Law Center said it would move the ball forward and that it was a game changer. Iowa Attorney General Tom Miller, who headed up the whole process, said “This agreement is the only way we’re going to get to substantial principal reduction.”

NAACP President and CEO Benjamin Todd Jealous said:

“This monumental settlement is a strong step towards assisting the millions of current and former homeowners that were exploited, discriminated against and taken advantage of by major mortgage servicing banks. The principal reductions, refinancing and other relief will provide desperately needed relief.”

Former White House Advisor, Van Jones, now running “Rebuild the Dream” and never one to miss an opportunity to pipe up about something somewhere said:

“That is small comfort, perhaps, but it was hard won. So we should honor the hard work of New York State Attorney General Eric Schneiderman, California Attorney General Kamala Harris and others, including many grassroots progressive organizations like New Bottom Line. They fought courageously to prevent a total sweetheart deal for the banks. This outcome is the result of determined activism, and without this heroic effort, the deal would have been drastically worse.”

All pretty big names with pretty big voices congratulating themselves and their colleagues over a job well done, but looking at what’s actually been accomplished in the last six months as a result of the settlement there’s been very little follow-through from anyone who previously saw this as a victory.

The Social Science Research Network released a study last month that was collaborative effort of the Federal Reserve Bank of Chicago, the government’s Office of the Comptroller of the Currency (OCC), Ohio State University, Columbia Business School, and the University of Chicago measure the impact of HAMP – the government’s anti-foreclosure program.

According to the report nearly 800,000 homeowners could have avoided foreclosure had the banks done a better job at modifying loans. ProPublica’s Paul Kiel put together a fairly in-depth article on the findings of the report, in which he writes:

“Unfortunately for homeowners, most mortgages are handled by banks that haven’t been properly staffed and thus have modified far fewer loans. If these worse-performing banks had simply modified loans at the same pace as their better performing peers, then HAMP would have produced about 800,000 more modifications. Instead of about 1.2 million modifications by the end of this year, HAMP would have resulted in about 2 million.”

It’s a bit sympathetic to the bank’s claims that they were understaffed and overworked, but still a worthwhile read.

So what about the $26 billion? In some cases, the banks are dragging their heels. The Office of Mortgage Settlement Oversight released its first report on August 29 – just six months later. According to the report, Bank of America, the bank responsible for the biggest portion of the agreement had yet to modify a single mortgage.

The Los Angeles Times reported

“The report showed that Bank of America Corp. faltered in one key area of the settlement, completing no modifications of first mortgages from March 1 to June 30, the period covered in the first status report released by the Office of Mortgage Settlement Oversight.

.
The other four banks covered by the settlement — JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. — reported that they had completed 7,093 modifications of first-lien mortgages worth a total of $749 million. JPMorgan Chase completed the most such modifications with $367 million.”

My name is John Wright AND I AM FIGHTING BACK!

All Rise!  The Honorable Judge Wright has left The Courtroom of Public Opinion!

.

Follow John’s Daily Blog

Register to be part of my blog

.

Your donation makes a difference in my life.

….

.

.

 

.
PRIVACY NOTICE: Warning – any person and/or institution and/or Agent and/or Agency of any governmental structure including but not limited to the United States Federal Government also using or monitoring/using this website or any of its associated websites, you do NOT have my permission to utilize any of my profile information nor any of the content contained herein including, but not limited to my photos, and/or the comments made about my photos or any other “picture” art posted on my profile.

You are hereby notified that you are strictly prohibited from disclosing, copying, distributing, disseminating, or taking any other action against me with regard to this profile and the contents herein. The foregoing prohibitions also apply to your employee , agent , student or any personnel under your direction or control.

The contents of this profile are private and legally privileged and confidential information, and the violation of my personal privacy is punishable by law. UCC 1-103 1-308 ALL RIGHTS RESERVED WITHOUT PREJUDICE

.