A couple of weeks ago, ACORN put pressure on four large corporations it labeled “home wreckers” because these mortgage lenders continue to refuse to modify mortgages so that they take only 31 percent or less of a homeowner’s monthly earnings. A scattering of ACORN volunteers showed up in front of the Federal Reserve Building in downtown St. Louis in support of a nationwide push by ACORN to get the four big corporate holdouts to sign on to the Making Homes Affordable Act that Congress passed last March. And one of the four targeted companies, OneWest in Pasadena, CA, caved. It was quite a victory for ACORN.
But now one of the other four “home wreckers”, Wilbur Ross, with the help of Tim Geithner at Treasury, is thumbing his nose at ACORN and the American public in general. … Did I say “thumbing?” I could be mistaken about which digit he’s using.
Geithner has named Wilbur Ross as one of nine fund managers for the Public-Private Investment Program, or PPIP. Using a mixture of federal and privately raised funds, PPIP will buy $40 billion in toxic assets from financial institutions.
It’s a sweetheart deal for this home wrecker.
ACORN is upset, for starters, with the hypocrisy of handing over a deal that screams conflict of interest to someone who won’t even do the minimum, sign on to a program meant to keep people from losing their homes. The Obama administration claims to be trying to keep people in their homes and then tosses Wilbur Ross a multibillion dollar boondoggle.
To muddy the waters, Ross claims that his company has been modifying mortgages:
Ross noted that his company has completed more than 64,000 loan modifications in the past year, with 86 percent of borrowers reaping a payment reduction.
Sorry, Wilbur, but modifying someone’s mortgage from, say, 58 percent of their monthly earnings to maybe 45 percent is not the same as signing on to the act and reducing those payments to 31 percent or less.
More important, though, is the conflict of interest. A couple of years ago, Ross foresaw that the mortgage crisis might eventually deepen enough to force the federal government to step in and buy toxic mortgages at face value or, anyway, at more than their actual worth. So he started a company that bought huge swaths of toxic securitized investment vehicles. Now he’ll be one of nine people deciding whose securitized investment vehicles the government will buy.
Obama is allowing Geithner to hand Wilbur Ross the keys to the candy store. Question: Does Ross deserve even a single M&M?
Update: Speaking of ACORN rallies, the group is holding one in front of Wells Fargo at Jefferson and Market on Tuesday, the 14th, at noon, to protest the massive public relations and lobbying campaign by big banks to stop real banking reform. ACORN’s St. Louis Metro director, Glenn Burleigh says:
“When you buy a microwave oven or a toy for your child, you have the security of knowing that someone has checked to make sure those products are not going to explode in your face. We need the same security when we sign on the bottom line for a loan or a credit card,” said Glenn Burleigh, St. Louis ACORN’s Head Organizer. “For too long, the rules have been written and enforced for Wall Street, by Wall Street. Now groups funded by AIG and others are spending billions of dollars on a massive public relations and media campaign to keep things exactly the way they are. It’s time for the Big Banks and brokers to call off the dogs and stop blocking real protection for ordinary Americans.”