Protesters rally in D.C. for harsher sanctions on mortgage servicers
By Dina Elboghdady and Arianna Eunjung Cha
Monday, Mar 7, 2011
Monday, Mar 7, 2011
Housing advocates rallied at several sites across Washington on Monday, starting with a stop at Bank of America on 15th Street NW, to press for tough sanctions against mortgage servicers involved in widespread foreclosure processing problems.
The National People's Action, a network of community organizations from across the country, said it wants to heighten awareness of the talks taking place as federal agencies and the nation's attorneys general try to craft a settlement that is expected to involve financial penalties and mandatory mortgage modifications.
One rallying point was the Fairmont Hotel, where Iowa Attorney General Tom Miller is scheduled to update his counterparts this afternoon about the talks. Miller's chief policy deputy, Tam Ormiston, joined the crowd outside in a quick prayer.
The attorneys general are planning to take questions from the media at 4 p.m., after their meeting.
In the prayer, the Rev. Tony Pierce of Illinois urged the chief law officers to "stiffen their backs" and "do justice by the American people." As Pierce spoke, protesters corralled on the sidewalk thrust their banners into the air. One said: "Make Wall Street Pay."
Many of the protesters were reacting to press reports about a $20 billion financial penalty under consideration by negotiators.
"It's peanuts. It's chump change," said Hugh Espey, executive director of Iowa's Correction Corporation of America. Espey said his organization has met twice with Miller to discuss its concerns about mortgage servicing practices. "The [reported] penalties do not go far enough. We think it should be in the hundreds of billions of dollars."
Espey echoed the demands of others in the crowd, who also want to see some of the bank executives criminally prosecuted.
"The only people who can hold the bank executives accountable are the AGs," said Shanna Rogers of Maine who lost her home to foreclosure and addressed the crowd about her mortgage troubles.
The extensive foreclosure problems - from flawed or fraudulent paperwork to questions about improper or incomplete loan transfers - surfaced in September, when large firms such as Bank of America and Ally Financial abruptly halted foreclosures.
Soon after, various state and federal agencies and law enforcement branches launched probes into the mortgage-servicing industry. The 50 state attorneys general formed one group. The Departments of Housing and Urban Development and Treasury, the Federal Deposit Insurance Corp. and others began a separate investigation.
One banking regulator, the Office of the Comptroller for the Currency, which is independent of the administration and oversees the nation's largest banks, began crafting its own possible settlement with the institutions it oversees.
Fearing long delays in help for distressed borrowers if each bank had to make separate deals with each agency, senior Obama administration officials and the state attorneys general eventually joined together.
In the coming weeks, state and federal officials are scheduled to sit down with bank executives to hammer out the details of the proposed deal. So far, its framework and dollar amounts have been shifting, several sources said, though the settlement is likely to cost the financial industry billions. Banks also have warned in recent filings that they stand to incur fines.
Ormiston, Iowa's deputy attorney general, shook hands with many of the protesters, who relayed their problems in dealing with mortgage servicers. He declined to comment about the negotiations, the dollar amounts involved, or the possibility of criminal prosecutions except to say that the prosecution issue "has been raised."
"We want to get to the spot where we can help people wade through this," Ormiston said. "We're all in this together."
After the Fairmont, the protesters boarded bus to Capitol Hill, where they plan to hold press briefings.
The National People's Action, a network of community organizations from across the country, said it wants to heighten awareness of the talks taking place as federal agencies and the nation's attorneys general try to craft a settlement that is expected to involve financial penalties and mandatory mortgage modifications.
One rallying point was the Fairmont Hotel, where Iowa Attorney General Tom Miller is scheduled to update his counterparts this afternoon about the talks. Miller's chief policy deputy, Tam Ormiston, joined the crowd outside in a quick prayer.
The attorneys general are planning to take questions from the media at 4 p.m., after their meeting.
In the prayer, the Rev. Tony Pierce of Illinois urged the chief law officers to "stiffen their backs" and "do justice by the American people." As Pierce spoke, protesters corralled on the sidewalk thrust their banners into the air. One said: "Make Wall Street Pay."
Many of the protesters were reacting to press reports about a $20 billion financial penalty under consideration by negotiators.
"It's peanuts. It's chump change," said Hugh Espey, executive director of Iowa's Correction Corporation of America. Espey said his organization has met twice with Miller to discuss its concerns about mortgage servicing practices. "The [reported] penalties do not go far enough. We think it should be in the hundreds of billions of dollars."
Espey echoed the demands of others in the crowd, who also want to see some of the bank executives criminally prosecuted.
"The only people who can hold the bank executives accountable are the AGs," said Shanna Rogers of Maine who lost her home to foreclosure and addressed the crowd about her mortgage troubles.
The extensive foreclosure problems - from flawed or fraudulent paperwork to questions about improper or incomplete loan transfers - surfaced in September, when large firms such as Bank of America and Ally Financial abruptly halted foreclosures.
Soon after, various state and federal agencies and law enforcement branches launched probes into the mortgage-servicing industry. The 50 state attorneys general formed one group. The Departments of Housing and Urban Development and Treasury, the Federal Deposit Insurance Corp. and others began a separate investigation.
One banking regulator, the Office of the Comptroller for the Currency, which is independent of the administration and oversees the nation's largest banks, began crafting its own possible settlement with the institutions it oversees.
Fearing long delays in help for distressed borrowers if each bank had to make separate deals with each agency, senior Obama administration officials and the state attorneys general eventually joined together.
In the coming weeks, state and federal officials are scheduled to sit down with bank executives to hammer out the details of the proposed deal. So far, its framework and dollar amounts have been shifting, several sources said, though the settlement is likely to cost the financial industry billions. Banks also have warned in recent filings that they stand to incur fines.
Ormiston, Iowa's deputy attorney general, shook hands with many of the protesters, who relayed their problems in dealing with mortgage servicers. He declined to comment about the negotiations, the dollar amounts involved, or the possibility of criminal prosecutions except to say that the prosecution issue "has been raised."
"We want to get to the spot where we can help people wade through this," Ormiston said. "We're all in this together."
After the Fairmont, the protesters boarded bus to Capitol Hill, where they plan to hold press briefings.
