States to set up fund for foreclosure victims similar to BP’s
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TEXT OF INTERVIEW
JEREMY HOBSON: Staying on the housing front there’s a report in this morning’s Washington Post that says lenders are in negotiations with states to set up a fund. It would be similar to the one for victims of the BP oil spill. This one would be for people who can prove they lost their home in a foreclosure that shouldn’t have happened.
Let’s bring in Richard DeKaser, economist with the Parthenon Group. He’s with us live from Boston. Good morning, Richard.
RICHARD DEKASER: Good morning.
HOBSON: This is the latest twist in the whole mess over mortgage documentation and foreclosure documentation. Would a fund like this solve the problem?
DEKASER: I think it’s a win win. For people who have been wrongfully foreclosed, it gives them a venue to pursue an efficient and streamlined process of getting damages. On the other side, the lenders who’ve been going through an excruciating media experience get to finally take this off of the front page.
HOBSON: Yesterday we got a report from the Congressional Oversight Panel on this whole mortgage document issue. They said it could cause severe harm to the financial system but they seemed to have no sense of the scope of the whole thing. Does anybody have a sense of how big this is and what the possible effects could be.
DEKASER: The short answer is no. I have not seen a single reliable estimate of the total number of foreclosed properties wrongfully conducted. We know that the process is broken, but we don’t know what the outcomes have been. So this a big “if” and it’s another reason why I think it makes sense to try and move this all into a settled arrangement were people are finally trying to resolve it in an efficient way.
HOBSON: Richard DeKaser, with the Parthenon Group, thanks as always for your time.
DEKASER: My pleasure.
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