And now, a few far-fight Republican attorneys general have broken with their counterparts in order to carry water for the banking industry. Virginia Attorney General Ken Cuccinelli (R) said that he opposes the settlement because modifying mortgages to keep troubled homeowners out of foreclosure amounts to “welfare”:
Cuccinelli said he opposes principal reductions. “That sounds like a welfare discussion, not a regulatory discussion,” he said. “That’s not the appropriate role for attorneys general.”
Cuccinelli believes that restricting a woman’s right to choose, smearing climate change science, and attempting to overturn the Affordable Care Act are all within the purview of the attorney general’s office. But policing mortgage fraud is somehow inappropriate? Also, as Paul Krugman explained today, the notion that mortgage modifications constitute welfare is simply nonsense:
The proposed settlement only calls for loan modifications that would produce a greater “net present value” than foreclosure — that is, for offering deals that are in the interest of both homeowners and investors. The outrageous truth is that in many cases banks are blocking such mutually beneficial deals, so that they can continue to extract fees. How could ending this highway robbery be bad for the economy?…Getting banks to clear up mortgage debts — instead of stringing families along to extract a few more dollars — would help, not hurt, the economy.
Cuccinelli is not the only right wing attorney general to go to bat for the banks; Oklahoma Attorney General Scott Pruitt (R) also opposes the loan modification portion of the settlement.
At the same time that Republicans are criticizing a modest settlement following the widespread malpractice in the mortgage servicing industry, they are actively voting in Congress to “pull the plug” on federal foreclosure prevention programs, instead of fixing them to better serve homeowner who are faced with losing their home through no fault of their own. Analysts predict that more than one million homes will be foreclosed upon this year.