Today's announcement of a $25 billion settlement between the federal government, 49 states and the District of Columbia, and the nation's 5 largest mortgage servicers over foreclosure abuses represents the second largest civil settlement ever obtained by the state attorneys general. Wisconsin will receive an estimated $140 million that will go toward direct relief to affected homeowners, refinancing benefits for eligible borrowers, and remediation programs and services.
"This is a good first step toward making defrauded homeowners whole and reforming our broken mortgage system," said Baldwin, who has been leading the fight in Congress to see that the victims of fraudulent bank practices be adequately compensated and that the banks be held accountable for their actions. "Today's settlement is narrowly limited to one area of financial abuse and does not right the wrongs of the past five years. However, it does pave the way for continued investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis," Baldwin said.
Baldwin went on to say that she hoped the Financial Crimes Unit announced by President Obama in the State of the Union address would further investigate and prosecute mortgage abuses not covered by the present settlement. "Thousands of Wisconsin families continue to struggle because of the fraudulent behavior of Wall Street mortgage lenders. I will continue to work on behalf of Wisconsin families to see that they are made whole and that wrongdoers are held accountable," Baldwin said.
In November 2011, Baldwin introduced House Concurrent Resolution 85 stating that any action taken by the U.S. Department of Justice should allow investigations of fraudulent mortgage and foreclosure practices to continue, deny broad immunity for potential wrongdoing by mortgage servicers, and appropriately compensate victims of fraudulent behavior.
Baldwin expressed her concerns in a letter to U.S. Attorney General Holder in early November and, the following month, sent a letter to Wisconsin Attorney General J.B. Van Hollen asking that he reject any settlement that grants Wall Street banks broad immunity from prosecution, ends investigations into the meltdown, or fails to adequately compensate those homeowners who have been defrauded.
As Baldwin previously called for, the agreement retains homeowners' right to pursue their own legal actions. It also holds mortgage servicers accountable and does not grant them or their executives immunity from criminal prosecution. It also provides for nationwide reforms to make the lending industry, more transparent, more navigable and more fair.