Make the Banks Pay Their Fair Share!
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The foreclosure crisis just keeps getting worse. More than 12 percent of residential mortgage loans are in foreclosure or at least one payment past due. Millions of homes have been needlessly foreclosed on because banks have not modified homeowners’ mortgages to affordable levels. On top of this misery, the U.S. Department of Housing and Urban Development’s (HUD’s) funding for counseling to prevent foreclosures has been cut to zero.
Government efforts to hold banks accountable for the “robo-signing” scandal continue. Last month, federal regulators ordered banks to clean up their mortgage-servicing processes to prevent wrongful foreclosures. Federal and state officials also have proposed that the banks pay $20 billion in penalties. The banks have offered $5 billion, but they object to using the money to reduce mortgage principal amounts.
There may be more news to come on improper foreclosure practices by the banks. A new report shows the HUD Inspector General has found more evidence of wrongdoing:
The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents.
Unconscionable Executive Pay at Fannie Mae and Freddie Mac
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The top six executives of the two mortgage giants, Fannie Mae and Freddie Mac, received a combined total of $35.4 million during 2009 and 2010. According to a newly issued report by the inspector general of the Federal Housing Finance Agency, the CEOs of both companies alone were paid a shocking $17 million over the past two years.
This level of executive compensation is simply unconscionable at a time of economic recession, financial bailouts and housing price declines. Both Fannie Mae and Freddie Mac have been bailed out by taxpayers for more than $153 billion to date. The total cost of the federal bailout could rise to as high as $363 billion through 2013.
More disturbingly, these payouts come when millions of working families have lost their homes to foreclosure. Fannie Mae and Freddie Mac simply have not done enough to modify homeowners’ mortgages to affordable amounts. And some of the mortgage servicers used by Fannie Mae and Freddie Mac improperly robo-signed foreclosure documents.
Fannie Mae and Freddie Mac were established by our government to help make homeownership more affordable. The top executives of these companies should be paid on the same scale as government regulators, not like Wall Street executives. These payouts show exactly what is wrong with our financial system where corporate greed trumps the public interest.
Obama Housing Plan ‘Aims Straight at the Heartland’
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As many as 9 million homeowners who are facing foreclosure or struggling with skyrocketing monthly mortgage payments could save their homes under the terms of a home rescue plan President Obama unveiled yesterday.
When the Bush economy began to tank more than a year ago with banks failing and jobs vanishing, foreclosure signs and abandoned houses began sprouting in working and middle class and even up-scale neighborhoods around the nation. The AFL-CIO first called for a homeowners’ lifeline in late 2007. But the Bush administration preferred to bailout Wall Street instead of throwing a lifeline to Main Street. Says AFL-CIO President John Sweeney:
The swift action by the Obama administration to address the housing crisis is a welcome and refreshing change.
For more than a year, the Bush administration ignored calls from the AFL-CIO and others to address a coming foreclosure tsunami. Tragically, in the months that followed, the deepening housing debacle turned millions of families’ lives upside down and strengthened its chokehold on our economy
