For years, efforts to curb smoking were met with glossy advertising, slick marketing and public indifference. Then in 1998, state attorneys general teamed up and went after the biggest cigarette makers, suing for the money states spent on treating sick smokers. The deal had tobacco companies pay billions and curtail marketing. Since then, several cities have outlawed smoking in certain places.
That deal is a model for the yearlong negotiations between state attorneys general from 46 states and the five biggest mortgage services in the U.S. Think national, act local. Have the industry change its practices and help those who have been hurt.
These talks are getting close to a deal. It’s entirely possible the proposed agreement may be announced in the coming week. If it is, the settlement would come a little more than a year after the practice of robo-signing foreclosure documents highlighted just how sloppy banks were at handling the housing collapse.
While these talks are likely to produce multibillion dollar penalties for Bank of America, Citi, JPMorgan, Wells Fargo and Ally Financial (formerly known as GMAC), finding solutions to the millions of underwater mortgages and struggling homeowners has proven elusive.
The White House predicted its mortgage modification strategy would help 3 million to 4 million homeowners when it was unveiled in the spring of 2009. Fewer than 1 million have been able to lower mortgage payments permanently.
A settlement over slipshod foreclosure practices holds the promise of helping underwater homeowners and getting big banks to behave better, but it won’t entirely extinguish what ails housing.
Tom Hudson, anchor and managing editor of “Nightly Business Report,” can be followed on Twitter HudsonNBR.