We've been covering the dysfunctional mortgage industry for a while now -- its systemic implications, what it means for troubled borrowers looking for modifications, and the big picture in Bob Kuttner's latest magazine feature. On Wednesday, Iowa Attorney General Tom Miller, who is leading a national investigation into pernicious practices in the industry, had this to say:
“We will put people in jail. One of the main tools needs to be principal reductions, just like in the farm crisis in the 1980s. … There should be some kind of compensation system for people who have been harmed…And the foreclosure process should stop while loan modifications begin. To have a race between foreclosures and modifications to see which happens first is insane.”
If anyone doubted the importance of these problems, those comments alone should focus their attention. But this is a complicated subject, with unique problems across a spectrum of stakeholders -- consumers, investors, banks, the government, anyone who owns a house, and, at the broadest level, everyone who wants to see an economic recovery and a healthy financial system.
To help get a handle on everything that's going on, I've organized a panel at the New America Foundation this coming Tuesday, Dec. 21, with a group of very smart people who will explain this issue from all angles: Alon Cohen, who writes the Center for American Progress' series on foreclosure mediation, Julia Gordon, senior policy counsel at the Center for Responsible Lending, Damon Silvers, a member of the Congressional Oversight Panel and special counsel at the AFL-CIO, and Mike Konczal, Roosevelt Institute fellow and finance blogger extraordinaire.
If you're at all interested in this issue -- and believe me, you should be -- do attend the panel or watch it live on the Internet.
-- Tim Fernholz