Foreclosure Victims Get Little Of Huge Settlements
The headline-grabbing civil lawsuit settlements against financial institutions highlight one solid trend: relatively little of the money goes to the actual victims, if we know how much at all. Take the story in the Atlanta Constitution-Journal about the $968 million SunTrust deal which reports “… it is unclear how much of the money will go to those who lost their homes. But in Georgia, 9,864 people will be eligible for checks to make up for some foreclosure abuses, said Nels Peterson, the state’s solicitor general.”
But, the paper adds, “… the bulk of the local money will be available for loan modifications or other aid for homeowners who are currently in default, are in imminent danger of defaulting or are underwater on their loans (meaning they owe more than their homes are worth).” Sooooo – not so much “cash” as “loan modifications.” Right.
There might be a better use of settlement money: how about allotting some cash for “civil Gideon” functions? How many of those 10,000 victims in Georgia alone would have dodged the wrongdoers if they had legal representation?
It’s an idea that’s bound to gain traction as CityBank eyes a $10 billion settlement.