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Mike hopes to see the world turned upside down through local communities banding together for social change, especially churches which have recognized the radical calling to be good news to the poor, to set free the prisoners and oppressed, and to become the social embodiment of the reign of God on earth as it is in heaven. He lives with the blessed memory of his wife, in Durham, NC, and has three adult children living in three different states. He also shares his life with the Mt. Level Missionary Baptist Church in Durham, the faculty and students of Shaw University Divinity School in Raleigh, NC, and the faithful fans of Duke and Baylor Basketball in his neighborhood.

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Thursday, July 07, 2011

Attorneys General Must Get Tough on Foreclosure Fraud

NAAG is the National Association of Attorneys General.  AGs from the fifty states and the various other jurisdictions such as territories, districts, etc., gather periodically to cooperate in how to manage common issues and work together on multi-state problems.  Some of the cooperative work they have done includes the Tobacco Settlement and the current Foreclosure Fraud Investigation.

Through North Carolina United Power, I have been participating with a working group of national organizations who are in conversation with the AGs about the Foreclosure Fraud Investigation.  Recently, we took a group to Chicago to meet with some of them about their work to protect homeowners and keep families in their homes.  I was interviewed by the local CBS radio affiliate in the hours before our meeting.

Among the key items of our agenda are:
  • broad availability of principal reductions to reset the housing market and remove the risk of more foreclosures;
  • remedies for all who have been harmed by fraud other criminal acts, whether they have already suffered foreclosure, are in process, or are facing impending foreclosure;
  • the end of dual tracking, with simultaneous loan modification discussions and foreclosure procedures;
  • all possible efforts for loan modifications and other non-foreclosure procedures should precede the initiation of foreclosure procedures;
  • criminal prosecutions for criminal acts; and
  • regulatory regimes to keep this kind of mortgage fraud from being repeated.
We were able to meet with four of the state Attorneys General:  Lisa Madigan of Illinois, Tom Miller of Iowa (the leader of the task force working on the foreclosure fraud investigation), Roy Cooper of North Carolina (President of NAAG who pushed the foreclosure fraud investigation forward), and George Jepsen of Connecticut (newly elected).  Our conversation was formal, perhaps overly so.  We discussed our agenda, they discussed their records, and then we exchanged questions and vague answers.  The time was short:  only 30 minutes.  There was very little new that came out of the meeting, but do not assume that I am saying it was not worthwhile.  Let me clarify why this was such an important meeting.

In organizing, we plan an action to get a reaction.  When we get our reaction, then we evaluate what we have learned and begin to plan future research and actions in light of it.  Our action in Chicago revealed a number of important things about our work on to change the conditions faced by so many families being hit by foreclosures.

This action showed something to our organizing groups, to the four AGs present in our meeting, to the many other AGs at the hotel but not at our meeting, and to the press and their readers.  To us, it showed that we have the power to bring the key law enforcement figures in the foreclosure negotiations to the table, even if we and they know they cannot negotiate publicly with us about potential criminal proceedings against banks.  Not only do they meet with bankers.  They also meet with us.

To the AGs present, we were able to deliver a multiracial, multiethnic, knowledgable, prepared, faith-based and non-faith-based, nationwide constituency to speak intelligently and passionately about this critical work they are doing.  They found us to be what we said, representatives of hundreds of thousands of citizens, thousands of churches and synagogues and mosques, and from states all across the nation.

To the AGs not present, we made it publicly clear that their colleagues who are leading in this foreclosure investigation are willing to meet with us.  Miller, Cooper, Madigan, and Jepsen will meet with us not only in their private chambers back home but in a public forum where they can express, even with the press in the room, their strong agreement with our agenda.  They were very adamant that they would not settle for an agreement that did not fundamentally change the practices of mortgage lending and foreclosure.  They believe the result must benefit homeowners and borrowers, not primarily get lenders off the hook.

To the press and their readers (including bankers) we were able to show that the case for principle reduction remains strong, with a powerful constituency.  Among the key items reported was the commitment to take banks to court if the negotiations do not bring fundamental change.  These AG negotiators  have not given up on a strong settlement and will not accept a weak settlement.  Our action got broad coverage in newspapers and in banking industry news sources.

The investigation and negotiation of a settlement could come very soon.  Or it could drag on through the summer.  Sooner is better, and we are expecting to see a court decree with tools to provide real help to homeowners.

2 comments:

Anonymous said...

Dr. Broadway, I would like more insite into the details of this meeting. What is the proposal with the principal reduction? The blog states that the reduction would help the homeowner by reducing the principal (which is obvious); however, I don't see how the banks will not be harmed.

Henry J. Rodgers said...

Attorneys General Must Get Tough on Foreclosure Fraud


Dr. Broadway, your blog on the workings of the NAAG is very informative and encouraging. You have introduced me to this association and its functions. It is very impressive to see the efforts and coming together of the Attorneys General across the fifty states to reason together over common issues and multi-state problems. It is a testament that the issues can be settled and problems solved through cooperation and dialogue.
It is evident that you and the North Carolina United Power and the national organization group have your fingers on the pulse on the Foreclosure Fraud situation. I am grateful for the education and the bringing to the front the issue of Foreclosure Fraud. You are soldiers, fighting for justice and equality in this present economical environment. I feel that the agenda items reveal a concerted effort to assist, resolve and prevent future risk of foreclosures.
Although the meeting was short, I can appreciate your assessment, stating your purpose and aim for that first encounter. You seemed to know that this was the beginning of the process, a time for each group to lay their cards on the table, so to speak, in order to further contemplate an appropriate course of action. I applaud you and I stand with you in this stance – in support of so many families being hit by foreclosures. Your organizing strategy, “plan an action to get a reaction, then evaluate from what is learned to plan future research and actions” is a great teaching tool.
I agree that the meeting was a great success, for it has informed me and heighten my awareness of the plight of many families being hit by foreclosures. I realize that the bringing together of various law enforcement figures, bankers and gaining national attention, crossing racial lines, representing hundreds of thousands of citizens, thousands of churches and synagogues and mosques, and from states all across the nation was no small endeavor.
Thank you for exposing me to this information, for your stand and commitment. I look forward to future actions concerning this issue.

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