The long awaited announcement last week that the Obama Justice Department and state attorneys general have reached a settlement with five of the largest mortgage lenders over foreclosure practices contains a mixed bag of consumer benefits: a regrettable lack of connection between the alleged legal violations and remedy provided, coupled with the all too familiar grandstanding by the Democratic attorneys general. As Oklahoma Attorney General Scott Pruitt indicated when his state refused to join the settlement, this settlement went beyond the actual alleged legal violations. It contains generous terms for those who may have fallen victim to shoddy foreclosure practices, but equally generous benefits for those who were never subject to any such practices. While I suspect that many of his fellow Republican attorneys general agree with Pruitt's assessment, it is completely understandable given the dire housing market that some conservative attorneys general would reluctantly sign on to the settlement. And so it is that this settlement, which even the Washington Post described as "rough justice", is firmly located in the American political neighborhood at the intersection of "Principles Street” and "Pragmatism Avenue.” 

Read more