Consumer Law

Geithner's solution for Robosigning: Don't Fund Legal Aid for Homeowners

By Alan White

The Nation reports on a little-noted controversy between Ohio's Congressional delegation and Treasury Secretary Geithner, about whether states can use the Hardest Hit Fund (TARP money set aside for states clobbered by the crisis) to fund legal aid and counseling for homeowners in foreclosure.  Treasury apparently could not rely on its own legal staff to interpret the statute, and so called on a Wall Street law firm, Squires, Sanders & Dempsey.  The leader of that firm's financial services litigation team lists the following as a firm achievement:  "Representing an industry organization with regard to recent mortgage foreclosure issues and litigation in Ohio and at the national level."  Not surprisingly, SS&D advised Treasury that Hardest Hit Funds could not be used for legal aid for homeowners in foreclosure.  Senator Sherrod Brown's June 1 letter presenting the argument in favor of funding legal aid is here.  The statute itself is available here.

Full post as published by CL&P Blog on December 10, 2010 (boomark / email).