Visit msnbc.com for breaking news, world news, and news about the economy
MSNBC TRANSCRIPT:
>>> if these were free-standing small businesses, they would go under, and the next guy that got hired to do it would say i’m not doing that for a dollar. it costs $5. and that would be painful, but we’d have a process where the market would provide $5 of service, i would think. we’re not getting there. we’re not going to get there naturally.
>> well, some testimony about the incompetence in the mortgage industry from a congressional hearing in maryland. that just part of what we need to address this country’s ongoing fraoreclosure and housing mess which is at the center of our decline in revenue collections and dysfunction in our economy. state attorneys general meeting in washington to talk about their fight to try to fix the nation’s dysfunctional housing system, floating a plan that would impose some new requirements on banks, but includes no financial or criminal penalties for past violations or any major reforms for what happens now. that plan not good enough for understandable reasons for many homeowners. protesters hitting d.c. monday to demand actual real solutions, including principal write-downs and mandatory loan modifications for banks who lent money they never had, were bailed out to collect their bonuses, and left the american homeowner on the hook. we’re breaking this debt down now with a man who helped organize some of those protests, george gayle, executive director of the national people’s action and dana milbank with “the washington post,” who himself is having problems with his mortgage and wrote a column about it recently. dana, fill us in.
>> well, i don’t want to complain too much for my own sake because i wasn’t in danger of foreclosure, but i had a whole battery of problems — the escrow account got all messed up. they didn’t make the payment to the homeowners insurance. they paid twice on the taxes. they gave me checks i wasn’t owed and fees and interest rates i wasn’t supposed to get. the point, though, is i talk to a lot of consumer advocates and said, look, this is happening hundreds of thousands of times, if not millions of times, and in many cases, it is driving people into foreclosure who would not otherwise be there. that, in turn, is driving down the economy further and making the housing market and the broader economy a struggle all the much further. the problem now seems to be not so much in the origination of these loans, but in the servicing of these loans. these guys have no incentive to get it right. they’re just trying to get maximum fees from people out there. in my case it was annoying. in many other people’s cases, it’s devastating.
>> yeah. george, the mortgage servicing industry, which is basically the four big banks– wells fargo, citi, b of a and jpmorgan, set up a business to collect payments and process paperwork in a bull market for housing. they are not staffed, they are not equipped, they are not designed to be a major customer service organization working with modifications and all the rest of it. how do you solve a problem where you have a massive demand for customer service when the people that would provide that service have no incentive to invest or step up for the very service that’s needed?
>> we need somebody to step in and actually make them do it. and three years into the crisis, i think homeowners are just shocked that nobody from the administration on down has really went toe to toe with the big banks and said you have to modify loans, you have to reduce principal, and if bankers broke the law in the process, they need to go to jail. so, yesterday, we had hundreds of homeowners pay an uninvited visit to the national association of attorney generals, to their convention, which was in d.c., and really demand. we’ve seen the document. we’ve seen their 27-page proposal, which is really an opening bid with the banks in it. it’s too weak. it would not modify mortgages or send bankers who broke laws to jail.
>> dana, put on your political analysis hat. we had this conversation 50 ways on this show, but do you have any insight why proposals like george is mentioning never even get brought up by democratic or republican leadership?
>> well, i’m afraid the answer is somewhat cynical, and of course, the banking industry is extremely well plugged in here in washington, and it is a matter of bipartisan failure. you had the obama treasury department not enforcing its own foreclosure laws. the foreclosure mitigation law became as a result a disaster as the mortgage servicers just basically ignored it. and now the republican answer isn’t to fix the program and crack down on these guys, it’s to toss out the entire program. there is potentially one solution. that is, if this new consumer financial products protection bureau actually gets in here and starts cracking down on these mortgage servicers. that’s not how it’s going to work out if the house republicans get their way. and in fact, we’re going to start hearing about this in hearings starting next week.
>> if you were to look at what you think is most achievable, george, obviously, you’re an activist and you’re organizing around this issue, which i compliment and encourage. where do you think you could have the most impact and how can people help you have the most impact right now?
>> i really think this attorney general settlement and investigation is the big opportunity. it’s the best shot we’ve had in the last three years to really deliver justice to the american homeowner. so, what folks can do is plug in through a website called crimeshouldntpay.com. and homeowners across the country are organizing together to make sure the ags side with the american people, protect the bottom line of the american people, and stop protecting the bottom line of the american banks. the ags got an opportunity to be heroes here. they could be the first elected officials to really step up on behalf of the american people, and now we’ve got to make them do it.
>> but let’s be honest, what we’re seeing in the preliminary part of this ag settlement doesn’t reflect what you’ve just described.
>> no. i think the opportunity is there. do i think they’re leading at that level? no. so, we’ve got to up the pressure, put more pressure both on the ags and directly on the banks and force them to the table to negotiate in a real way. but i agree totally, the settlement does not go far enough. we’ve got to keep pushing. it’s particularly frightening because it’s an opening bid. as an opening bid, know the banks and the lobbyists and the power they have, they’ll continue to weaken that bid. we need to get the ags back to the table to come up with a stronger proposal before they go into negotiations with the banks.
>> got it. listen, thank you so much, george and dana. and thank you, dana, for highlighting your own story as an indication of somebody who is economically stable and well off and well connected being run around like a chicken in a maze, as everybody is through this banking system, reminding us of what that really means for people who are significant economic challenges and do not have the access to power that somebody like you does. crimeshouldntpay dot-org or dot-com?
>> dot-com.
What's been said:
Discussions found on the web: