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Homeowners to Eric Holder: Hold banks accountable

By Seth Freed Wessler
Colorlines

Attorney General Eric Holder

Attorney General Eric Holder

Homeowners and former homeowners rallied in front of the Department of Justice Monday to demand the Attorney General Eric Holder hold banks accountable for foreclosures. The groups are asking the Department of Justice to prosecute banks and to protect the 13 million homeowners who struggle today with underwater mortgages.

The groups organizing the protest, the Home Defenders League and Occupy Homes, are pushing for aggressive prosecutions of banks responsible for the foreclosures. They’re also demanding the government act to reset underwater mortgages that now threaten millions more families with foreclosure.

But these demands appear to be a long shot. The protest comes several months after Attorney General Eric Holder said that some banks may be too big to prosecute.

“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them,” he said.

He recently clarified his comments during a congressional hearing. “Let me be very, very, very clear: Banks are not too big to jail.”

But actions may speak louder than these most recent words.

Prosecutions for financial fraud hit a 20-year low after the financial collapse. Instead, state and federal regulators have punished banks responsible for the foreclosure crisis with several dozen settlements, but as we’ve learned in recent months, these agreements often left those who lost homes with nearly nothing.

Three million of the four million foreclosure victims who got payments though the largest of these efforts received checks of less than $500, ProPublica reports. And the Washington Post reports that banks have paid out less than half of the $5.7 billion the institutions agreed to pay in over 30 settlements.

Black and Latino families have been hit the hardest by the foreclosure losses.

According to the new report “Wasted Wealth” released by The Alliance for a Just Society, about 2.5 million families lost homes in just three years, where foreclosures were twice as frequent in communities that were majority people of color than in majority white communities. With it came an average loss of wealth 30 percent higher per household.

As Colorlines.com’s Imara Jones wrote about the report: “This foreclosure tidal wave is why wealth for Blacks and Latinos is at the lowest level ever recorded. Housing is the leading wealth asset for these two communities.

“Although the real estate market overall has regained $16 trillion in wealth lost during the recession, these gains are largely driven by a frenzy for high-end properties at the very top of the market. ‘Wasted Wealth’ contrasts these highs with the fact that more than 13 million homes continue to remain at risk for foreclosure.”

 

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