Attorneys General across the country held press conferences this morning to boast their 'victory' against the banks, having come to a settlement called the National Mortgage Settlement. If you haven't heard, it is an agreement by the 5 big mortgage loan servicers--JP Morgan Chase, Citi, Wells Fargo, Bank of America and Ally/GMAC--and the government, which requires the former to pay damages for practices that violated the law and caused the housing bubble burst. You can find out more information here.
Making Homes Affordable Program from 2009. I've contacted Chase, as outlined by the NMS website, on three occasions today and none of their representatives have any idea what I'm referring to or what to do. They are giving me information about my foreclosed property that has nothing to do with the NMS process. One referred me to their lawyer's office, who also has ZERO clue about this settlement.
So what's going on here? It looks like another complete failure by both government and the banks. We always hear the business community tell us that capitalism works and is so great because private industry can do things better and more efficiently than government. Oh yeah? Then why is the government making an announcement about an agreement 5 private banks made and yet the banks have no clue about it? I've worked in a call center before; I've even worked for a banking call center. When big news is being released, the call center is notified a day or two ahead of time in order to prepare for possible questions and responses. That would be an efficient business model in my opinion.
It's beginning to look like another case of the run-around, whereby the government gets positive PR out of the housing crisis by appearing 'tough' against the banks. The banks get positive press out of it because they 'settled' as opposed to getting dragged into court and 'forced' to pay out for their violations of the law. Good PR for everyone, but empty promises for the average consumer.
It's only day one, but this is already sounding a lot like my experience with the Making Homes Affordable Program, which we all know was a failure!
As a post script, before you comment on this blog about people shouldn't own homes if they can't afford it--like this guy--go back and read my story. I bought the place with a very well paid job and a lot of money in savings in addition to perfect, pristine credit (in the 800s). The reason I could no longer afford my mortgage was NOT a result of overextending myself, it was a result of a collapsed economy that prevented me from finding work. This was also the case for millions of others in America.