Legal Commentary

Geithner Refusing To Provide Funding For Legal Aid For Homeowners

By Big Tent Democrat

HuffPo:

The 2008 bank bailout bill gave the Treasury secretary broad discretion to spend money to fend off foreclosures. But while Treasury has approved $7.6 billion in expenditures to help states prevent and clean up foreclosures[. . . ] States initially applied for funds from the program in the spring of this year, but the Treasury refused to extend money for tackling legal bills. [. . . Sen. Sherrod] Brown and 30 Democratic members of the House sent a letter to Geithner asking him to reconsider his decision. Geithner refused[. . . MORE]

Geithner cit[ed] a memo from Treasury General Counsel George Madison, which contends:

Legal aid services are not necessary and incidental, as a matter of law, to the implementation or effectiveness of the HFA Hardest-Hit Fund, because: (1) Congress has provided other specific appropriations that fund the same type of legal aid services proposed by the state Housing Finance Agencies ("HFAs"); and (2) legal aid services are not necessary or essential to the implementation of a loan modification program.

This is wrong as a matter of law. Nothing in the law impedes the use of these funds for legal assistance. Most likely, Geithner asked for a legal opinion telling him not to provide these funds. Geithner is a corrupt incompetent. He should be fired immediately.

DISCLOSURE: I advise homeowners regarding loan modifications and foreclosures.

Speaking for me only

Full post as published by TalkLeft on December 15, 2010 (boomark / email).