Let’s contrast two lawmakers from the Upper Midwest and their reactions to the still-without-terms foreclosure fraud settlement.
Al Franken has a video out toeing the party line on the settlement, really just informing borrowers that, over the next 6-9 months, they may be contacted if they’re eligible for a cash payment from a wrongful foreclosure or the opportunity to refinance or get a principal reduction on their loans. He does say that “the specific terms of the settlement are still coming to light,” which is correct. It’s more of a public service announcement than anything. But Franken includes the familiar construction that the settlement is a “small but important step.” He adds that he contacted federal regulators in December 2010 about robo-signing and other deceptive practices, and that at the time “none of us knew just how widespread or devastating they were.” But really, we still don’t. The investigations have been too small to plumb the depths of the problem, and now we’ll probably never know, at least on the order of document fabrication and servicer abuse.
Contrast this with Tammy Baldwin, the Wisconsin Democratic Congresswoman who is running for US Senate. Baldwin did agree with the “small but important step” construction, but she also reacted to one of the first negative consequences of the settlement. In her home state of Wisconsin, Scott Walker and the Attorney General, JB Van Hollen, announced they would take a large portion of the cash payment to states made available through the settlement, and instead of applying it to forelcosure mitigation programs, they would apply it to the General Fund to fill their budget hole. Baldwin spoke out loudly about this.
Leaders of the Milwaukee Inner-city Congregations Allied for Hope, Milwaukee Mayor Tom Barrett, U.S. Rep. Tammy Baldwin (D-Wis.) and others urged city and state residents to call and write Walker and Van Hollen to pressure them to use the entire $141 million settlement to deal with the state’s foreclosure crisis.
“It’s another Christmas and we find ourselves with a lump of coal,” said the Rev. Willie Briscoe, president of MICAH. “People are suffering because they have lost their homes. Families have been displaced and now we are being robbed again. We have to say ‘No more, no more,’ ” he said, as 20 or so others repeated the chant “No more.” […]
Baldwin released a letter she sent Tuesday to U.S. Attorney General Eric Holder describing Walker’s actions with the settlement funds. In the letter she asks that, if there are future settlements with banks or other institutions involved in illegal, fraudulent or deceptive practices, these settlement funds “should be required to be used toward helping struggling homeowners.”
Actually, we don’t have to look forward on this one. There are no settlement terms. Baldwin should be pressuring Holder and the AGs to ensure that funds go to homeowners in THIS settlement, not in future ones.
Baldwin authored a House concurrent resolution, which has dozens of co-sponsors, that said “Any financial settlement reached with mortgage servicers should appropriately compensate for, and accurately reflect, the extent of harm to all victims, including homeowners and State pension beneficiaries, caused by the mortgage servicers’ fraudulent behavior.” Clearly that isn’t happening if millions of dollars from the settlement are being diverted by the states into their General Fund.
I’m glad Baldwin is pressuring Holder (here’s the letter) and the officials in her state to send this money where it belongs, to help homeowners. But we don’t have to think about this as a going forward idea. We can get that done on this settlement, the terms of which have not been disclosed.
There’s a petition to Gov. Walker at Baldwin’s Senate campaign site.