New York, NY--Demos views the mortgage servicing deal reached today between a coalition of state Attorneys General and 5 major Wall Street banks as an important stepping stone in the effort to secure justice for homeowners victimized by the foreclosure crisis. The following is a statement by Heather McGhee, Director of Demos’ Washington Office:
“This settlement is perhaps most valuable for what it doesn’t do: give Wall Street a free pass. Thanks to the determination of Attorneys General from states hardest hit by foreclosures, the provisions that would have extended far-reaching immunity to Wall Street banks from all future fraud-related prosecution have been removed, limiting today’s agreement narrowly to the robo-signing infractions uncovered last fall.
“But the settlement announced today is insufficient on its own. The $17 billion pledged for principal reduction – and the nearly-insulting $2,000 in homeowner restitution – pales in comparison to the total $7.7 trillion in household wealth lost in the mortgage meltdown. Until a settlement is reached that secures a level of funding reflective of the degree of wealth lost in this crisis – and is distributed to those who need it most – the case of mortgage fraud and abuse will remain unresolved.
“State Attorneys General must continue to work with federal officials to ensure that banks complicit in the mortgage meltdown are held fully accountable for their actions. Failure to do so will risk continued, wrongful foreclosure - not just of underwater mortgages, but of pathways to the American Dream itself.”
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