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Groups tell Madigan, Donovan: ‘No’ to foreclosure deal

Community groups confronted HUD Secretary Shaun Donovan and Illinois Attorney General Lisa Madigan on Monday over a foreclosure fraud settlement the groups say is entirely inadequate.

Protestors sang, prayed, and testified outside a room in the O’Hare Hilton where Donovan and Justice Department officials were meeting with staff from state attorney generals to urge them to sign on to a settlement in a case arising out of the “robo-signing” scandal of October 2010 (see 10-21-10 Newstip).

The groups object to the deal with the five largest mortgage services – including Bank of America and JPMorgan Chase — as a “slap on the wrist” that would shield them from legal liability for a wide range of foreclosure misconduct.

(Van Jones of Rebuild The Dream and George Goehle of National Peoples Action spell out some concerns at Huffington Post.)

“President Obama and Attorney General Madigan must choose,” says Rev. Marilyn Pagan-Banks of Northside POWER. “Will they settle for a deal that benefits the 1 percent and lets the big banks off the hook? Or will they stand with the 99 percent and fight for accountability and a solution that will help millions of people?”

The O’Hare meeting may have been called to create an aura of inevitability around the settlement, Firedoglake reports, but none of the state attorney generals who have criticized its provisions were expected to attend.

Dissension in the ranks

Attorney generals of New York, California and other states have opposed provisions of the settlement that would give banks blanket immunity for misconduct and shut down ongoing investigations in New York and elsewhere.

Last week attorney generals from a dozen states (not including Illinois) met in Washington DC to discuss coordinating investigations — and their displeasure with settlement talks, according to Huffington.

Madigan is on the committee that is negotiating the settlement. After 50 state attorney generals began an investigation in 2010, the Obama administration began pressing for a settlement. (At Politico, Simon Johnson calls the case the administration’s “last chance” to stand up to banks.)

Several weeks ago members of the regional organizing network IIRON met with Madigan staff to express their displeasure with the deal. “They seemed surprised that we didn’t think the settlement is a great thing,” said Kristi Sanford.

When they learned of the meeting Monday, they organized a rally at the State of Illinois building – and upon learning the meeting’s location, a contingent set out for O’Hare.

There a couple dozen members of community groups from across the city asked a Madigan staffer if the attorney general could spare a few minutes to talk with them. The aide never returned – but police came to ask the protestors to leave, Sanford said.

The groups want banks to agree to write down underwater mortgages, and they say there must be a full-fledged investigation of bank misconduct. Criminal behavior by banks in the scandal is alleged to include perjury, filing false documents, illegal foreclosures, and investor fraud.



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