Once again, the illustrious Jerry Brown has grandstanded on behalf of the little people in order to get some headlines, and then turns his back on them while running for governor.
More than a year ago, as attorney general for the state of California, Mr. Brown filed a lawsuit against Countrywide Home Loans and its subsidiaries for its unlawful predatory lending practices, which was shown in great specificity in the complaint that was filed. Countrywide and Bank of America agreed to settle the lawsuit by agreeing to spend $8 billion dollars to modify those predatory loans.
Once that agreement was put into place, Mr. Brown pounded his chest and told everyone who was listening that he brought Countrywide to its knees, and that thousands of people would have their homes saved and the crash in real estate values would end. Countrywide/Bank of America announced their home retention program through which they would address all of these loans.
Fast forward one year, and we discover that foreclosures still take place, the value of property had continued to plummet, and realistic mortgage modifications are few and far between.
I have worked with many victims of these predatory loans, and my experience has been that they either say “You don’t qualify,” or they come up with a “modification” that is meaningless and unworkable. That allows the lenders to say, “Most of the modifications that are made are defaulted on again.”
Furthermore, Countrywide is a small percentage of the problem. Why didn’t Brown sue the others, such as World Savings (now, Wachovia and Wells Fargo) and Washington Mutual (now Chase)? There are dozens of others that continue to use government bailouts, while allowing the victims of these predatory loans to wallow in despair, destitution and continued unemployment.
Oh, I forgot. He needs to concentrate on another run for governor.
Thursday, July 23, 2009
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