|Reps. Eshoo and Lofgren, California Democratic Congressional Delegation Call on President Obama to Provide Meaningful Relief to Homeowners|
Washington, DC – Today, Rep. Anna G. Eshoo (D-Palo Alto) and Members of the California Democratic Congressional Delegation (CDCD), chaired by Rep. Zoe Lofgren, sent a letter to President Obama urging fairness for the nation's struggling homeowners. The Members are seeking to ensure any deal reached by the Administration and state Attorneys General with the nation's biggest banks is fair to victims of mortgage abuse, and does not grant immunity to the worst offenders.
In October, California Attorney General Kamala Harris exited the multi-state settlement negotiations, instead announcing an independent investigation to hold the biggest banks fully accountable. Today's letter encourages the President to follow Harris' lead, seeking meaningful relief for homeowners in California and across the country.
"Homeowners in my District and across the country have been chewed up by mortgage servicer abuses," said Rep. Anna Eshoo. "The complaints run the gamut from robo-signing to dual tracking, and even to lost paperwork, and to date there have been few consequences for banks even as the foreclosures continue. President Obama should not support any plan that grants the banks immunity for a pittance of a settlement. My constituents deserve a full accounting of bank abuses, as well as meaningful relief. I applaud Attorney General Harris for her leadership, and urge the President to join in her effort."
Zoe Lofgren, chair of the California Democratic Congressional Delegation, said, "Time and again we've asked that the Administration take strong action on behalf of our constituents who have been victimized by mortgage servicers. Homeowners are following the banks' rules, and yet continue to be treated poorly. I hope that this Administration does not settle for the deal being pushed by the banks. Giving banks broad immunity would be settling—we must stand up for our constituents and demand more. Attorney General Harris's refusal to accept the initial terms is a good move for Californians and homeowners across the country."
United States Attorney General Eric Holder and 48 state Attorneys General have been working with the nation's five largest mortgage firms -- Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo -- to reach a settlement over alleged illegal foreclosure practices in the wake of the financial crisis. According to some news reports, the settlement would only amount to $5 billion in real penalties to mortgage servicers. Furthermore, the proposed settlement would only help a fraction of those affected by the foreclosure crisis in California. The most-cited example of abuse is the so-called "robo-signing" of foreclosure documents.
In October, Eshoo, Lofgren and the CDCD sent a separate letter to Attorney General Harris commending her decision to pursue a more equitable resolution for homeowners. In their letter, the Members stated:
California has been hit extremely hard by the housing crisis. One of every 226 housing units in our state received a foreclosure filing in August – a rate over twice the national average...30 percent of homeowners with mortgages in our state are underwater – again one of the highest rates in the country. These problems do not just impact homeowners directly – they are devastating for realtors and construction workers who are losing work, for local government losing property tax receipts, and for all sorts of small businesses who lose customers.
For this reason, we feel that it is critical that any settlement regarding these abuses must be fair to California homeowners. In particular, we believe that a deal must be structured to provide substantial relief for these homeowners.
The letter that Eshoo and the California Democratic Congressional Delegation sent this week to President Obama is below :
December 15, 2011
The White House
Washington, DC 20500
Dear President Obama:
California homeowners, and those throughout the country, continue to suffer as a result of the irresponsible and fraudulent actions of the mortgage industry. We write in support of California Attorney General Kamala Harris' continued investigation into the potential misconduct and fraud by the mortgage industry. Her determination to provide meaningful relief for California homeowners led to her decision in October 2011 to leave the multi-state settlement negotiations with the major banks. Attorney General Harris recently announced that she would be aligning her efforts with Nevada's, with each state committing more resources and energy towards holding the mortgage industry accountable for their actions.
In October 2011, California ranked second in the country, behind Nevada, in percentage of housing units that entered the foreclosure process—with nearly one in every 243 California homes entering the foreclosure process in that month alone. We know that California has been home to a myriad of abuses as we catalogued numerous constituent cases in a letter we sent to your Administration last year urging an immediate investigation.
We support Attorney General Harris' recent decision to pursue an independent investigation. We believe that any meaningful settlement must provide assistance for struggling homeowners—particularly those underwater—and should not grant banks a broad release from liability for abuses that have not been investigated and are not remedied by the settlement. The current multi-state settlement under review would relieve the banks of further liability without fully investigating the alleged wrongdoings. Furthermore, it would not provide meaningful relief to homeowners as it would apply to only 13% of the mortgages serviced by banks nationwide. It would likely result in $5 billion in real penalties to mortgage servicers, with the rest of the settlement coming in the form of non-cash accounting losses that servicers would have experienced anyway, as the borrowers they declined to assist went into foreclosure. We can and we must do better for our constituents.
Attorney General Harris' commitment to delivering a fair outcome for those who have been wronged by the mortgage industry should be commended. We hope that you will join her and advocate for stronger terms that will have a real impact for hard-working Americans who were victimized by the mortgage industry.
|Thomas Bill Search|