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- iHaveNet.com: Economy
by Jesse Jackson
June 1, 2011
It isn't clear what is worse: the housing crisis that keeps deepening or the reports of pervasive banking fraud that keep getting exposed. With the banks facing billions in potential damages, perhaps some measure of justice can be done to the homeowners who have been the victims of the crisis and the crimes.
We're still not at the bottom of the housing mess. Home prices continue to fall. Now nearly 30 percent of homes with mortgages are under water. Another 2 million in foreclosures are due to come. Banks are sitting on hundreds of thousands of foreclosed homes, a dead weight on any recovery in home prices.
For millions of Americans, this is a calamity. The savings they thought they had in the value of their homes are gone. Many are paying on mortgages for homes that may never return to their original value. Millions are losing their homes to foreclosure, or choosing to walk away from investments that no longer make sense.
This is the fallout from the housing bubble and bust that triggered the global recession, and has left nearly 25 million in need of full-time work, while generating crippling budget deficits at the local, state and national level.
What is increasingly coming clear is that beneath this calamity is an extensive pattern of fraud, negligence and misbehavior by America's biggest banks.
Last week,
Who were the five mortgage companies who together handle three-fifths of all U.S. mortgages? Only a Who's Who of our respected and biggest financial institutions:
The bank scandals in the housing mess -- from robo-signing, to mortgages financed on fraudulent terms, to defective securitization, to foreclosures on innocent homeowners -- keep piling up. And now, efforts by the banks to shut down the investigations seem to be failing. In Illinois, the attorney general is reportedly examining potentially fraudulent court filings. Nevada and Arizona have launched lawsuits against
When the bubble burst in 2007 and 2008, Washington's response, starting under Bush's Treasury Secretary Hank Paulson, was to focus on rescuing the banks. They were bailed out by the Treasury and the Federal Reserve. They emerged from the crisis bigger and more concentrated than ever. No major officer of a big bank was prosecuted. Million-dollar bonuses returned.
But now more and more indications of pervasive fraud or illegal mishandling of mortgages are piling up. Taxpayers and many homeowners have suffered losses as a result. The time for investigation, for prosecution and for remedy is long past due.
You can write to the Rev. Jesse Jackson care of this newspaper or by e-mail at jjackson@rainbowpush.org.
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Will the Banks be Held Accountable?