'Tis the season for lambasting companies that choose profit over relieving this country's housing crisis. This time around, the Scrooge Award goes to Goldman Sachs, whose loan collection subsidiary Litton Loan Servicing blocks attempts to modify loans while its parent company doles out massive bonuses to company executives.
According to ABC News, "With the exception of maybe AIG, no firm has come to symbolize Main Street's disgust with Wall Street practices more than Goldman. In a move that caused a global backlash, Goldman has said it expects to set aside more than $20 billion for bonuses and other forms of employee compensation and benefits at the end of the year."
Looks like a visit from the Ghost of Christmas Past is in order. Goldman Sachs was a major beneficiary of the taxpayer bailout TARP. While they've paid back the $10 billion we loaned them in this agreement, they've apparently turned a blind eye to the importance of social capital, choosing growth at the narrow bottom line and top-level incentive over the creation of sustainable communities.
Meanwhile, Litton makes it harder for families to keep their homes. "Loan servicers [like Litton] make their money on late fees, so there is a perverse incentive for them not to work out solutions," said Julia Gordon, senior policy counsel at the Washington, D.C.-based Center for Responsible Lending. "Meanwhile, there is zero incentive for them to help a family stay in their home." To date, Litton has assisted in the modification of only 12 percent of qualified client home loans. This is the worst variety of stinginess.
This holiday season, let's send a message to Goldman Sachs and other Scrooges who profit from an unhealthy and broken housing system: no more.
Image from Yahoo!
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