19 Organizations Tell Obama: Share Goldman Sachs Settlement With Struggling Homeowners

Letter Calls For Treasury’s Share of Settlement to Go to Principal Reduction, Mortgage Counseling, Reclaiming Foreclosed Homes as Affordable Housing.

Courtesy: theeconomiccollapseblog.com

(BERKELEY, Calif.) - In a letter sent Friday to President Obama and Secretary of the Treasury Timothy Geithner, a coalition of 19 organizations led by the Greenlining Institute call the just-announced settlement between the Securities and Exchange Commission and Goldman Sachs “disappointing,” arguing that it “does nothing for struggling homeowners.”

The letter calls for the Treasury Department’s $300 million share of the proceeds to be used for principal reduction for borrowers who are “under water” due to crashing home values, grassroots mortgage counseling for struggling homeowners, and to allow local nonprofits to purchase and repair foreclosed homes for use as affordable housing. The settlement as announced contains no aid for homeowners struggling to avert foreclosure. $550 million, the total settlement amount, represents just one day’s revenue for the giant Wall Street firm, the letter notes. And while acknowledging a need to compensate investors who were victims of fraudulent practices, the letter adds, “It is galling for the most vulnerable victims of this crisis to be ignored while investors -- most of whom are in no danger of losing their homes -- get paid off.” The full text of the letter follows:

July 16, 2010

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Source: Greenlining Institute