A national network of faith groups is disappointed over the announcement of a $26 billion home foreclosure payout by the U.S.'s five biggest banks, saying that the amount is just a "small drop in a big bucket" compared to the $700 billion in total equity lost during that period.
"Today's announcement of a multi-state mortgage servicing settlement must be the first, not final, step towards a just resolution to the housing crisis," reads a statement from the PICO National Network, a faith-based association operating in more than 200 cities.
Ally Financial, Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo announced on Thursday that they would be making the payout to nearly two million current and former homeowners throughout forty nine states for a total amount of $26 billion. About one million people will have their current mortgage reduced while another 750,000 who lost their homes will receive checks for about $2,000. The payout will be made over a three-year period.
PICO said that the restitution payment for those who lost their homes is a "tiny fraction of the wealth stripped from so many families, especially families of color," and said that the group will, "continue to fight to ensure that the current deal is just a down payment on a much larger settlement that does justice for American homeowners harmed by the big banks' criminal activity."
PICO did acknowledge, however, that the settlement was "stronger than it would have otherwise been" due to the efforts of Attorney Generals from states like California, New York, Nevada, Delaware, and Massachusetts.
"Because of their work and the work of many grassroots organizations around the country, momentum is building towards broad-scale relief for homeowners," they said, adding that President Obama has acknowledged that getting homeowners out of debt is key to rebooting the economy.
PICO also had some words for the president, urging him to appoint new leadership of the Federal Housing Finance Agency, which manages Fannie Mae and Freddie Mac. The current director of the agency is Ed DeMarco, a Bush Administration hold-over who has "repeatedly sided with Wall Street over ordinary homeowners," PICO says.
Obama tried to replace DeMarco last fall, but his efforts were stymied by Alabama Senator Richard Shelby. PICO recommends that the president make a recess appointment or appoint someone who has already been confirmed for another position by the Senate.
Meanwhile, the faith group is lobbying that reparations for injured homeowners continue beyond the current payout, which they say needs a "strong robust enforcement mechanism…with swift and severe consequences for banks that fail to live up to the terms of the settlement."
"State Attorneys General must continue investigating – together with the federal task force – Wall Street's role in causing the housing crisis and ensure that the banks that caused the crisis right their wrongs," they said.
"With estimates that we are only halfway through the foreclosure crisis, every public leader – from local and state legislators, to state Attorneys General, to Members of Congress – should be working to hold banks accountable for helping stop the crisis and avoid millions of additional foreclosures."