For immediate release
Thursday, February 12, 2015
The Association of Mortgage Investors (AMI) Commends Chairman Tom Marino and the House Judiciary Committee for Responsible Oversight over Defective DoJ Bank Settlements that Negatively Affect Average Americans, Unions, and Seniors
The Association of Mortgage Investors (AMI) commends House Judiciary Subcommittee Chairman Tom Marino (R-PA) and the House Judiciary Committee for its responsible oversight regarding the defective U.S. Department of Justice bank settlements that negatively affect average Americans, unions, and seniors.
AMI represents the managers of mutual funds and long-term investors for state and local pension and retirement funds for a range of public institutions, including unions, teachers, and first-responders. AMI members are fiduciaries for their clients. In that capacity, it is incumbent upon them to review any and all situations that would impact their clients’ investments, such as the recent settlements.
On Thursday, the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law holds a hearing examining a number of issues, including the bank-servicer settlements. AMI and its members have long been critical of these settlements. AMI Board President Vincent A. Fiorillo noted, “The objective of any settlement should be to advance the public interest and to help responsible consumers who may have gotten into trouble, not creating deceptive big dollar headlines for political gain.”
In recent years, a number of settlements with the Justice Department and state Attorneys General have resulted in the responsible party shifting a portion of the settlement costs to RMBS investors. Yet, it is antithetical, if not patently unfair, for any institution to pass its penalty to another party, such as certificate holders such as seniors and 401K savers. These precedents are very troubling for investors and their impact on the general public. These are not unforeseen consequences, but rather an obvious scheme by bank-servicers to evade liability for their misconduct by further abusing their duties to investors. This affects our clients, and in turn the general public, whom are “Main Street.”
AMI has been on-the-record as supporting a settlement of claims against the mortgage servicers, provided that it does not harm average Americans and their 401Ks. This means that any settlement must be appropriately designed to address such alleged wrongdoing while not settling with the money of innocent parties. The retirement security of these innocent parties will likely be impacted by this settlement as it is currently filed. The settlement was negotiated among the state Attorneys General, the federal government, and certain mortgage servicers. On behalf of the public interest, AMI asks that any future settlements focus on directly helping responsible consumers, not “short changing” them.
AMI supports long-term, effective, sustainable solutions to the housing foreclosure crisis. It is generally supportive of a settlement if it ensures that responsible borrowers are treated fairly throughout the foreclosure process; while at the same time providing clarity as to investor rights and servicer responsibilities. The ultimate settlement should ensure that our clients, who were not involved in the alleged activities and, who likewise were not a participant in any negotiations, do not bear the cost of the settlement. Specifically, mortgage servicers, if at all, should only receive limited, reasonable credit for modifying mortgages held by third parties, which are often pension plans, 401K plans, endowments and “Main Street” mutual funds. To do otherwise, will damage the RMBS markets further and limit the ability of average Americans to obtain credit for homes for generations to come.
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The Association of Mortgage Investors represents private investors, public and private pension funds, and endowments, all of whom support the efforts of Congress and the Administration to help responsible, though distressed homeowners avoid foreclosure. For more information, visit www.the-ami.org.
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