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How should foreclosure settlement money be used?

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How should foreclosure settlement money be used?

Postby obrienforgovernor » Sat Mar 24, 2012 10:06 pm

I think it would be useful to start this discussion now, before the money is spent on unrelated items. I think one good possible use would be to provide subsidized legal assistance to homeowners in foreclosure to see to it that all necessary legal procedures were followed, and challenge any improper foreclosures in a class action lawsuit. The legislature of course would have to authorize that, because presumably JB Van Hollen will not do it voluntarily.
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Re: How should foreclosure settlement money be used?

Postby obrienforgovernor » Sat Mar 24, 2012 10:24 pm

Or we could recruit attorneys to work pro bono on the issue, and provide the offices and phones necessary for them to function; then provide the funding necessary to help homeowners see through an appropriate class action lawsuit should it be warranted.
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Re: How should foreclosure settlement money be used?

Postby Steve Vokers » Sun Mar 25, 2012 5:29 am

Tax cuts for the rich and corporations.
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Re: How should foreclosure settlement money be used?

Postby obrienforgovernor » Sun Mar 25, 2012 11:58 am

People who need a lot of help are getting it, but the people who need just a little help, are on their own, even though they would be the easiest to help. With that in mind, what can the state do to help people who simply need a refi at current rates to stay in their homes?
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Re: How should foreclosure settlement money be used?

Postby snoqueen » Sun Mar 25, 2012 12:40 pm

I think people at risk but in salvageable circumstances should be helped (not sure how -- each situation is so different) but if all someone needs is to refinance, what's stopping them now?

Is it practical for the state to go after banks that offered fraudulent loans or later processed the loans in a fraudulent manner, or is that more an action for the feds? Maybe the state should join with other states in taking action -- this matter does not seem to be confined by state lines. Yes, I'm assuming Van Hollen is not on the side of the small homeowners here and we'd need to work around him.

I'm not sure the state needs to be recruiting lawyers to work pro bono, even if an office is provided. People should be paid in a fair manner for their work, even lawyers. And this one might require specialized expertise, not just a few well-meaning recent law school grads.

Possibly part of the funds could be used to tide homeowners over while their lawsuits proceed. You can assume the banks' lawyers will do everything they can to delay at each step, knowing individuals will run out of money before banks do.

I think one good possible use would be to provide subsidized legal assistance to homeowners in foreclosure to see to it that all necessary legal procedures were followed, and challenge any improper foreclosures in a class action lawsuit.


This makes sense to me because most people have no idea what happened to their mortgage once they signed the papers. From what I can tell, a lot of times nobody knows what happened, or who holds it now. Homeowners obviously can't negotiate these things solo.

I am glad to see these questions raised, even though a lot of us out here don't know enough to offer many ideas. Perhaps the job of a candidate for governor is to clarify the questions and come up with suggestions for how to use the settlement money so we have something to think about. It sounds like a good issue to run on.
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Re: How should foreclosure settlement money be used?

Postby Twinner » Sun Mar 25, 2012 12:47 pm

Oh I don't know, for people who had foreclosures and need a settlement?

It's too obvious.

Having said that Scotty will do what any fiscally responsible Republican does. He'll spend it on his friends and pocket the rest.
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Re: How should foreclosure settlement money be used?

Postby obrienforgovernor » Sun Mar 25, 2012 12:57 pm

Many people with underwater mortgages can't get a refi. This got me thinking. Maybe a certain amount of money should be set aside to help those who are in a little trouble first, to make sure funds help as many people as possible with the smallest risk of default, and as funds are paid back to move on to the next higher risk group, and so on, with the idea being to help as many people operating in good faith as possible. We could also structure the tax codes to allow banks which charter in Wisconsin to get favorable tax treatment based on how many individual homeowners facing foreclosure they help avoid foreclosure. The favorable treatment would be based on how many of those people they keep out of foreclosure for the life of the loan, which on intermediary basis could be rated based on how many people so assisted consistently make their payments on time.
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Re: How should foreclosure settlement money be used?

Postby snoqueen » Sun Mar 25, 2012 1:17 pm

Triage is often the best way to go in any crisis, so putting the money toward saving home ownership for those who are most likely to succeed with just a little help seems like the place to start. The other two triage categories -- people unlikely to succeed with any amount of help, and people who will probably make it on their own -- could come later.

I don't know where this leaves those who have already lost their houses. Some of them experienced fraud, and others just had a run of really bad luck or were inappropriate candidates for home ownership from the get-go. It seems like an insult to arrive at a settlement where they receive, like, $150. Still, it's important to acknowledge actual fraud where it occurred and offer compensation in some form. A house is a bigger deal than, say, a used car that looked all shiny but craps out shortly after you buy it.

Possibly this could be tied in with programs meant to help whole neighborhoods that are at risk. Any time you have vacant houses around, you're lowering property values for those who remain. People who lost a house in questionable circumstances might be offered super-affordable terms on a similar foreclosed property, for instance.

Incentives for banks seem like a good policy. I'd also like to see encouragement for banks who keep their mortgage loans in-house -- a few still do, so it's got to be possible.
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Re: How should foreclosure settlement money be used?

Postby obrienforgovernor » Sun Mar 25, 2012 1:42 pm

The state could also refuse to do business with any bank that has an unacceptably high rate of failed loans or evidence of systemic unfair loan practices relating to mortgage loans. That's the stick. Forgiveness to those institutions based on restoring those most affected by such practices, including those who lost their homes, would be the carrot.
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Re: How should foreclosure settlement money be used?

Postby obrienforgovernor » Sun Mar 25, 2012 11:04 pm

Enough of the business with what banks will or won't do. We need to use the foreclosure settlement funds to provide low- interest loans with which foreclosed homeowners might make an offer on their soon to be, current or former foreclosed residence. An NGO for the administration of said funds for that purpose alone and none other.
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Re: How should foreclosure settlement money be used?

Postby obrienforgovernor » Sun Mar 25, 2012 11:38 pm

The state should set up a separate twenty million dollar fund for underwater mortgages to provide low-interest, no cost loans on a merited basis. We should consider a class-action lawsuit on behalf of any victim of mortgage loan fraud, for the recovery of state funds expended.
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Subprime no more

Postby obrienforgovernor » Wed Apr 04, 2012 10:30 pm

Here comes the next wave of foreclosures. http://news.yahoo.com/americans-brace-n ... 53440.html
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Re: How should foreclosure settlement money be used?

Postby obrienforgovernor » Fri Apr 06, 2012 7:07 pm

While you read this next link, bear in mind that Governor Walker has said he intends to simply place foreclosure settlement into general revenue.http://host.madison.com/wsj/business/as ... f887a.html
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Re: How should foreclosure settlement money be used?

Postby obrienforgovernor » Sun Apr 29, 2012 7:32 pm

bump
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