California’s Court Settlement
The Attorney General of California has a mighty big question to deal with right now. She’s sitting on six and a half million dollars from a settlement with Countrywide Financial Corp. and I’m not sure she knows what to do with it. Now if it were hers to keep I’m sure there wouldn’t be too much hesitation. But seeing as how it belongs to the taxpayers, I think she needs to weigh her options pretty carefully before rushing into anything.
Basically, for a little background, Countrywide was accused of luring borrowers to them with great sounding deals that came back to bite them. They used what some people call under-handed practices to get a bigger slice of the national mortgage market and then were surprised when they got called out on them. In any other market they might have gotten away with it, but in the current witch-hunt frenzy for financial wrongdoing it was only a matter of time.
So rather than risk losing the case, Countrywide settled to the tune of $6.5 million which is now sitting in a neat little pile on the Attorney General’s desk. Which leaves her with a sticky question: how to use this money productively without causing more of the same problems?
The current idea: use the money to help foreclosed homeowners attempt loan modification programs and other methods for keeping their homes. Oh, and also to prosecute mortgage fraud. Always nice to make sure some cash slips back into the right pockets.
Look, there’s no denying California needs all the help it can get. They’ve been hit worst than most for the past few years and things aren’t clearing up any time soon. But we’ve seen that throwing more cash at the problem isn’t a solution in itself. Money must be used wisely to fix underlying problems. So unless someone out West is really trying to make a difference I don’t see any change coming with this settlement. But I keep dreaming…
