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Schneiderman: Settlement deal a `small’ but `significant’ step towards real accountability
Schneiderman: Settlement deal a `small’ but `significant’ step towards real accountability
By Greg Sargent
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In an interview with me just now, Schneiderman — who has gained a national liberal profile for his insistence on true accountability for financial institutions — conceded the settment announced today was “small” in financial terms, given the struggles of underwater homeowners and people who lost their homes.
But he insisted that time will show that today’s settlement was a win — that it secured a framework that will ultimately result in a true accounting of the role big banks played in sparking the economic meltdown.
“This is a small step in an economy where we have $700 billion in negative equity, but it is a significant step,” Schneiderman said, in response to criticism that the $25 billion settlement was far too small given the injuries sustained.
“This is a down payment towards the overall goal of accountability, meaningful relief for those injured by the meltdown, and getting the facts out so we can ensure that this never happens again.”
Pressed on whether a settlement that could result in as little as $2000 per injured homeowner could really be called a victory, Schneiderman said the fact that banks had not obtained any immunity on pre-crash conduct would ultimately yield the fruits of a major victory for the left.
http://www.washingtonpost.com/blogs/plum-line/post/schneiderman-settlement-deal-a-small-but-significant-step-towards-real-accountability/2012/02/09/gIQAw7P21Q_blog.html
By Greg Sargent
<...>
In an interview with me just now, Schneiderman — who has gained a national liberal profile for his insistence on true accountability for financial institutions — conceded the settment announced today was “small” in financial terms, given the struggles of underwater homeowners and people who lost their homes.
But he insisted that time will show that today’s settlement was a win — that it secured a framework that will ultimately result in a true accounting of the role big banks played in sparking the economic meltdown.
“This is a small step in an economy where we have $700 billion in negative equity, but it is a significant step,” Schneiderman said, in response to criticism that the $25 billion settlement was far too small given the injuries sustained.
“This is a down payment towards the overall goal of accountability, meaningful relief for those injured by the meltdown, and getting the facts out so we can ensure that this never happens again.”
Pressed on whether a settlement that could result in as little as $2000 per injured homeowner could really be called a victory, Schneiderman said the fact that banks had not obtained any immunity on pre-crash conduct would ultimately yield the fruits of a major victory for the left.
http://www.washingtonpost.com/blogs/plum-line/post/schneiderman-settlement-deal-a-small-but-significant-step-towards-real-accountability/2012/02/09/gIQAw7P21Q_blog.html
Jared Berstein made a great point:
<...>
Here’s what’s unique, useful and potentially important about the settlement: One of the main reasons the measures we’ve tried so far have underwhelmed is because they’ve all been voluntary from the perspective of lenders and servicers. No bank had to play along with HAMP or HARP. They had a choice of whether to respond to the incentives in the programs or not, and often it was “no thanks.” (By the way, that’s why I always liked the cramdown option — moves locus of action from solely being in the lenders’ hands.)
But the five banks named in the settlement must now set up processes to do refis and principal reductions. They don’t have a choice. And that’s a real advance.Who knows, with these processes in place, we can even dare to hope that the $17 billion, which is expected to be leveraged up to about twice that amount (i.e., banks are expected to provide a dollar of foreclosure prevention for $0.50 from the settlement fund) will be testing the waters for a deeper dive into mortgage modifications.”
http://www.washingtonpost.com/blogs/ezra-klein/post/experts-react-to-the-foreclosure-settlement/2012/02/09/gIQALQhz1Q_blog.html
Here’s what’s unique, useful and potentially important about the settlement: One of the main reasons the measures we’ve tried so far have underwhelmed is because they’ve all been voluntary from the perspective of lenders and servicers. No bank had to play along with HAMP or HARP. They had a choice of whether to respond to the incentives in the programs or not, and often it was “no thanks.” (By the way, that’s why I always liked the cramdown option — moves locus of action from solely being in the lenders’ hands.)
But the five banks named in the settlement must now set up processes to do refis and principal reductions. They don’t have a choice. And that’s a real advance.Who knows, with these processes in place, we can even dare to hope that the $17 billion, which is expected to be leveraged up to about twice that amount (i.e., banks are expected to provide a dollar of foreclosure prevention for $0.50 from the settlement fund) will be testing the waters for a deeper dive into mortgage modifications.”
http://www.washingtonpost.com/blogs/ezra-klein/post/experts-react-to-the-foreclosure-settlement/2012/02/09/gIQALQhz1Q_blog.html
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