The financial benefits of this unprecedented agreement are to be provided to homeowners whose mortgages are supposedly owned by the five largest banks involved, including Bank of America, Wells Fargo, Chase Morgan Stanley, etc.
Those benefits are to include more than $12 billion in principle reductions or a provision of short sales to more than 250,000 California homeowners who have gone underwater or who have gotten seriously delinquent in their mortgage payments. Another $849 million is to be provided for the refinancing of household loans for 28,000 homeowners who are in significant trouble on their payments. Additionally, $279 million will be offered in restitution to 140,000 homeowners who lost their homes through foreclosure between 2008 and Dec. 31, 2011. There is even money--approximately $1.1 billion--to communities overwhelmed by blight and disrepair, and to former owners for transitional help in moving somewhere else. Finally, beyond the $430 million in penalties and fees, there's to be a $3.5 billion pool of money provided to 32,000 homeowners to relieve the unpaid balances still charged to them after losing their homes through foreclosures.
Much of this money will be provided quickly to struggling homeowners during 2012-2013, and Harris is expanding her office's Mortgage Fraud Strike Force to speed up investigations of more bank wrongdoing.
Unfortunately, however, nothing in this great deal addresses Fannie Mae and Freddie Mac mortgages, which actually account for approximately 60 percent of California homeownership, according to the attorney general's office. Harris said she will now work on that piece of the puzzle.
It is very satisfying to see a sure-handed public servant really try hard to serve the public she represents. The political system surely needs more role models like this, and we, as constituents, certainly need more champions like this. More power to you, Ms. AG.
Professor David L. Horne is founder and executive director of PAPPEI, the Pan African Public Policy and Ethical Institute, which is a new 501(c)(3) pending community-based organization or non-governmental organization (NGO). It is the stepparent organization for the California Black Think Tank which still operates and which meets every fourth Friday.
DISCLAIMER: The beliefs and viewpoints expressed in opinion pieces, letters to the editor, by columnists and/or contributing writers are not necessarily those of OurWeekly.