Rep. Raúl M. Grijalva today called on the Department of Justice, the Federal Housing Finance Agency and other federal entities to prosecute banking fraud, help homeowners facing wrongful foreclosures, and stabilize the economy. Protests in Washington, D.C., yesterday by homeowner activists resulted in several tazing incidents and 17 arrests, leading Grijalva to question why public protests are needed to draw attention to one of the main causes of our weak economy.
"It's ridiculous that homeowners are facing more legal trouble than the people who destroyed our economy in the first place," Grijalva asked. "We know what happened. The whole tragic history of illegal foreclosure robo-signings and gigantic banker bonuses is public record. And yet here we are arresting working people who want their homes and their livelihoods intact."
As CNBC reported earlier this month in an article headlined "Foreclosure Crisis Still Has Millions in Its Grip," the recently negotiated federal settlement with big banks has done nothing to improve the economy or end most homeowners' difficulties:
More than two years after regulators confirmed widespread reports of abusive mortgage practices, the government is making only halting progress in fixing the problem, according to homeowners, their attorneys, housing counselors and public officials. It's not only a dilemma for the people caught in the foreclosure noose; it's also holding back a broader housing recovery and slowing the nation's economic recovery.
The scope of the systemic failure has been widely known for much longer, following widespread reports of lax procedures; flawed, inaccurate or missing documentation; and poor communication with borrowers. In April, 2011, the nation's top bank regulator, the Office of the Comptroller of the Currency, issued a sweeping enforcement action to address "failures and deficiencies" and ordered 14 lenders to fix them "swiftly and comprehensively."
"None of this is a secret, so why are we locking up hard-working Americans who just want us to follow through and put our economy back on track?" Grijalva said. "Where are Republican leaders calling for stronger measures to protect homeowners? Why is widespread mortgage fraud being rewarded with bonuses instead of jail time? These are fair questions that have been answered with tazings and arrests. It's high time Washington does the country a favor by taking the foreclosure crisis seriously. At a bare minimum, we need principal reductions to reflect our current economic reality and serious penalties for the people who knowingly caused this disaster in the first place."