Over six months ago, I wrote a piece for The American Prospect about something I dubbed “camo-washing,” an effort by big banks to prove their attentiveness to the foreclosure crisis by going out of their way to compensate military families for violations of the Servicemembers Civil Relief Act. These violations included egregious behavior, like moving to foreclose on active duty military while they served overseas in combat. And the banks moved swiftly to deliver mounds of retribution to those military members and the entire military by extension, promising to hire veterans and giving out free homes to those wronged by the scandal. As I said at the time, “Banks are hoping that by compensating members of the military for improper foreclosures, they can boost their public image and avoid responsibility for the broader foreclosure crisis and the truckload of violations committed against civilian borrowers.”
This has continued to happen. Yesterday, a day before Veterans Day, the Justice Department announced a settlement with Bank of America over violations of the SCRA. Each military member wrongfully foreclosed upon will receive $116,785, PLUS compensation for any lost equity when the home went into foreclosure. It comes out to about $20 million for 160 homeowners.
Let’s recall that the penalty for wrongful foreclosures slated to be paid in the foreclosure fraud settlement being bandied about right now, according to reports, is around $1,500. It is not out of a lack of respect for the men and women of the military when I say that they are not worth 78 times more in compensation for these crimes than everyday men and women abused by mortgage servicers.
And these are crimes, though the DoJ won’t follow through on that. The press release announcing the settlement very pointedly calls the incidents of wrongful foreclosures “the bank’s alleged violation of the Servicemember Civil Relief Act (SCRA).” In the same sentence it says that homes were “unlawfully foreclosed on,” but clearly this is yet another case where the bank won’t have to admit wrongdoing, and can just pay their way out of the problem. As the Justice Department states clearly, violating the SCRA, particularly through an illegal foreclosure while the servicemember is in service, is considered a criminal misdemeanor “which is punishable by a sentence of up to one year imprisonment.” (see page 7 of the linked pdf) Even this extraction of justice falls short.
The servicemembers caught up in this mess deserve that money, all $116,785 of it. And so do hardworking civilians who were duped into loans, ravaged by an Wall Street-caused economic meltdown and stonewalled or outright abused in their effort to save their homes. [cont’d.]
Consider this. RealtyTrac announced yesterday that foreclosures were back on the rise, because “lenders corrected foreclosure paperwork and processing problems,” according to its CEO. This is a falsehood. There is plenty of documented evidence showing that robo-signing is still happening. In the states where banks cannot get away with robo-signing, they have all but stopped foreclosing. The backlogs in these states will take several decades to clear. What this all means is that many thousands of American homeowners each month are subject to the same violation that befell these servicemembers – illegal foreclosures. The military members, by virtue of the clout of their institution and a banking industry looking to burnish their public image, are getting a handsome sum from the banks for their troubles. The rest of the borrowers can go jump in a lake.
And this is becoming a pattern. The Senate yesterday passed the “Veteran Employment Displacement of Other Job Applicants Act,” which gives large tax credits to companies that hire veterans, giving them a leg up on any job opening without adding to job growth in any way. The same day, the First Lady announced a private sector commitment to hire 100,000 veterans. Considering that the private sector will collect between $5,600-$9,600 a head for the hiring, I guess so!
A veteran deserves a job, and a military family illegally kicked out of their home deserves as much compensation as possible. Also, the engineer who’s been out of work for two years, and the former teacher looking for a job, or the marketing manager, or the stock-room clerk, or the executive assistant – all of them should have that opportunity as well. And when the banks rip a home away from any one of these people, they deserve justice and accountability too.