The New Bottom Line Blasts Expected AG-Bank Mortgage Deal

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The New Bottom Line Blasts Expected AG-Bank Mortgage Deal

WASHINGTON - The proposed $25 billion settlement agreement between state Attorneys General and five big banks involved in the robo-signing scandal would encourage the banks to help homeowners who are in less need of assistance and provide little relief to the most troubled homeowners, according to news reports.

“What the country and the housing market needs is a bold and broad fix - not broad immunity for banks’ criminal behavior.  Any settlement that is just about robo-signing should only release claims on robo-signing and nothing more. It should fix the servicing system and it should provide real relief to struggling underwater homeowners and those who have lost their homes,” said George Goehl, Executive Director of National People’s Action and an organizational member of The New Bottom Line. “This slap on the wrist is a slap in the faces of the millions of people who have suffered because of the massive fraud perpetrated by big banks.”

“This fight is far from over. We will keep the heat on the Obama Administration’s Financial Fraud Task Force to conduct a full investigation of the banks for all aspects of the mortgage crisis and require the banks to pay in full for what they broke. Anything less than $300 billion in principal reduction for underwater homeowners and $50 billion in restitution for families who wrongfully lost their homes is completely unacceptable,” added Tracy Van Slyke, co-director of The New Bottom Line.

News reports about the proposed settlement agreement indicate that the banks will be encouraged to focus on less-troubled borrowers and allow illegal foreclosures to continue.  This approach will not end the mortgage crisis, which Federal Reserve Chairman Ben Bernanke said this week was critical to improving the economy.

The expected agreement provides too much forgiveness for the banks that forged signatures on loan documents and illegally foreclosed on millions of families. The banks that acted wrongfully in the robo-signing scandal are Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial.

$750 billion represents the true scope of the problem of negative equity. A minimum of $300 billion would cover owner occupied, underwater mortgages serviced by the five big banks at the settlement table and would also require the holders of the majority of home mortgages in the country, namely Fannie Mae and Freddie Mac, to finally come to the table for American homeowners and the broader economy.

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The New Bottom Line is a new and growing movement fueled by a coalition of community organizations, congregations, and individuals working together to challenge established big bank interests on behalf of struggling and middle-class communities. Together, we are working to restructure Wall Street to help American families build wealth, close the country’s growing income gap and advance a vision for how our economy can better serve the many rather than the few. Coalition members include PICO National Network, National People’s Action (NPA), Alliance for a Just Society, and dozens of state and local organizations from around the country.

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