Another month comes to an end and the 50-State Attorney General agreement is as far from finished as it has ever been. Granted, no agreement is better than a bad agreement, but no progress is the worst of all.
As days turn to weeks, weeks to months, and months into over a year now the level of distrust continues to grow.
It’s irrelevant what one thinks about the agreement because, outside of a small group of insiders, we’re guessing. Feelings about the settlement are a Rorschach test — the test administered to judge what people perceive a random ink-blot to be — because we don’t know what we’re looking at.
We listen to rumors, politically motivated anonymous sources, and outbursts that make no sense when one thinks about them for a minute.
For example, take FL Attorney General Pam Bondi’s browbeating at state’s that rejected the settlement. Many think she’s right, and others think that she’s wrong. But nobody seems to be saying “who knows what she’s talking about, because we have no idea what the terms they’re objecting to are, much less whether we agree about why they rejected those terms.”
Given that Jamie Dimon and bank-friendly Bondi are two of the few who are both aggressively agitating in favor of the settlement it seems fair to say that it’s probably bank friendly. But the truth is that’s a wild guess: we don’t even know what we don’t know, much less the answers.
There is no rationale basis to be in favor or against the agreement given what’s publicly known about its terms .. nothing.
Here’s a radical solution. To speed the agreement along, why not open it up?
I know that settlements are always held in secret, but there’s no rule that they need to be. Since banks obviously want to bring close this deal, and since they must believe the terms are reasonable, let them open the drafts, the debates, and the entire process.
If the settlement terms are reasonable they might find opponents of the settlement change their position, or at least grumble that they can unhappily live with the terms, which is oftentimes how both parties to a good settlement feel. If the terms are unfair or nonsensical — for example, reports that CA which has 10.39% of the country’s housing would receive over 50% of the money — public reaction might help both sides smooth over some of these issues.
If the public understood the constraints that all parties were under they might be more willing to flex.
For example, banks allegedly (everything with this settlement is alleged) argue they cannot pay one more cent so let them show that; bank financials are public records. Similarly, if the public feels that the settlement inadequately reimburses injured homeowners and those who were foreclosed upon let them show that; those figures are also well-known.
There are already too many mysteries tied to housing. As I’ve repeated before, the 2010 census reports there are 52.2 million owner-occupied homes with mortgages, whereas the OCC reports about the same number of total mortgaged properties, including owner-occupied homes, rentals, and abandoned properties. Adding yet another mystery is not helping either side.
I’ve written before that working with housing data is like looking through a dirty window. I use technology to pull together, to aggregate, large amounts of information from a wide variety of sources in an effort to see through the data.
There are may players involved in the mortgage and foreclosure crisis, so the data is incomplete, and what is there is scattered in many places. In contrast, there are far fewer parties involved in the AG settlement and they’re all well-known.
Given the difficult time they’re having agreeing upon a deal, given the stakes involved, and given that the situation seems to become more politically volatile by the day, maybe it’s time to try something different: open up the process and shine some light in.
Apparently the seven symptoms of a Vitamin D deficiency are obesity, bone problems, a weak immune system, depression, high blood pressure, and asthma. It isn’t hard to see the economic equivalent of each regarding this settlement. But there’s an easy cure .. more sunlight.
Update: while I was writing this piece my friend and colleague Abigail Field was writing a great piece on almost exactly the same subject, Attorney General Champs, Chumps, and Eric Schneiderman.