The Most Cost-Effective, Shadow Bailout of Wall Street: $30M.

There’s currently a shadow bailout of Wall Street coming down the road, a complete steal for the low, low price of $30 million dollars.

(Remember “millions”?  In the context of shadow bailing out Wall Street, where you need to ante up “billions” and “trillions” to even sit at the table, it’s been a while since I’ve heard the “m” word.)

But for the low, low price of avoiding allocating a simple $30 million dollars Congress is looking to give Wall Street a massive amount of space to run wild.  And the new Republicans might be leading the charge.

What am I talking about? As Dave Dayen has written, the new Dodd-Frank Bill authorized, but did not appropriate, $35 million dollars for legal services for homeowners. And as Diane Thompson of the National Consumer Law Center said, “All of the robo-signing allegations were only discovered, brought to light by aggressive, competent attorneys working very diligently to represent their clients. Homeowners cannot negotiate these kinds of issues without lawyers. Low-income homeowners particularly need the lawyers… we urgently need that funding.”

I’ve heard from people I trust in the field the only thing that can hold Wall Street in check is keeping legal pressure in the courts on them with this foreclosure crisis. And if this $35 million dollar isn’t allocated any number of front line legal aid groups will have to slow down or shut down their operations. The reason you know about robosigners, the reason you know about the complete mockery Wall Street and shady overnight mortgage originators have made of our courts and our property rights, the reason you know about the gaming of the system of the servicers as it plays out in the field, is all because of front line legal aid groups.

Pay careful attention to what the request is. It’s a request to make sure people can represent themselves in court with someone who understands what is going on. This isn’t sort sort of homeowner bailout, a leveling of a playing field, re-organizing the disgusting way we deal with junior liens in the residential mortgage market to make it look like the corporate bond market, or anything else. This just makes sure working people in a terrible economy can be represented in court when they fight to protect their largest financial assets, a fight that if they lose poorly can leave them saddled with crushing debt for years.

Are there non-bailout and/or cover-up reasons we wouldn’t allocate this money?

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5 Responses to The Most Cost-Effective, Shadow Bailout of Wall Street: $30M.

  1. Pingback: Links 11/19/10 « naked capitalism

  2. Dr. Frankie says:

    “the new Dodd-Frank Bill authorized, but did not appropriate, $35 million dollars for legal services for homeowners.”

    One can only speculate as to why these very meager funds were not appropriated. The cynic in me wants to say that Dodd wanted to appear consumer friendly but, at the same time, made sure that Wall Street would have a chance of blocking this measure.

    “Hey! I voted for it but the bad guys blocked the funds. What can I say?”

  3. Erasmus says:

    Send this link to George Soros. I’m sure there’s some liberal billionaire who will help.

  4. Mike says:

    I find it interesting that lawyers seem to be universally reviled, yet there are scores of socially useful things they could be doing if the government would just pony up a little funding.

  5. Pingback: Countrywide Never Sent Mortgages to Trust, Now With Helpful Chart. « Rortybomb

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