With the media’s laser-like focus on the Obama-Republican tax deal, here’s a story that’s underreported: the Obama Administration’s coddling of the Big Banks and simultaneous neglect of homeowners facing foreclosure.
Consider this: the recent Fed audit revealed over $3.3 trillion in emergency assistance to the banks and other corporate behemoths during the financial crisis—no strings attached. Two trillion dollars to Morgan Stanley here, $600 billion to Goldman there, throw in a little chump change for McDonald’s, GE, others—no demands to increase lending to small businesses, or modify mortgages for unemployed homeowners, for example.
Then consider the 19 states which are recipients of the Hardest Hit Fund (HHF)—a portion of TARP money set aside to help homeowners in states struggling with the highest unemployment rates and steepest declines in the housing market.
Some of those states, including Ohio, let Treasury Secretary Tim Geithner know as far back as this past spring that they wanted to use some of those funds to assist legal aid groups that help individual homeowners. Seems like a reasonable request—unlike the absurdity of handing over trillions of dollars to robo-signing, foreclosure-mad banks, no questions asked.
Treasury solicited the opinion of an outside law firm, Squire, Sanders & Dempsey. Never mind that the firm’s clients include BB&T Corporation and payday lender CNG Financial Corp. The firm said, in essence—sorry, no can do on the legal aid. Not permitted under the TARP.
Huh? Hold on a sec—is this the same TARP that granted the Treasury Secretary all those "extraordinary powers" to protect people’s home values, preserve home ownership, promote economic growth, etc.?
Congresswoman Marcy Kaptur wasted no time in challenging Treasury’s interpretation. This comes as no surprise. The feisty, maverick Ohioan has consistently been ahead of the curve in the foreclosure fight—attempting to increase the number of FBI agents working on foreclosure fraud as far back as June 2009. She also told homeowners to demand that foreclosing banks "produce the note" back in 2008, more than two years before the robo-signing scandal revealed the extent to which banks are illegally foreclosing on people.
Kaptur let Treasury know that the interpretation was just plain wrong.
"We talked with Secretary Geithner about this back in June—we had mailed him letters," said Kaptur. "But of course with the big banks in charge, Treasury is sadly representing them more than the people being affected by this around the country and in places like Ohio. It didn’t have to be this way. And the carnage across the countryside in terms of empty neighborhoods, families destroyed, going into our shelters—it didn’t have to happen."