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» VISIT US ONLINE @ DSNEWS.COM 61 billion. JPMorgan Chase saw $6 billion in earnings, down a little from $6.5 billion, on $25.3 billion in revenue, and Goldman Sachs reported some $2 billion on $9.13 billion. Little reason, then, why e Journal ran a headline in January this year that proclaimed the largest financial institutions had returned "from the brink" with first quarter profits. Still, if another function of the recent settlement payouts was to deter risky lending, the California attorney says they haven't done their job. Gunderson admits to seeing the same high risk loans possibly leading to a "second wave of defaults." BORROWER RELIEF? Fanfare aside, billions of dollars in historic payout may not actually cast that wide of a net for homeowners in distress, at least not comparatively. at $20 billion or so in direct relief under the national settlement, for which payments began trickling down to borrowers in June last year, reached only approximately 600,000 homeowners—a curiously low fraction of the millions who lost tens of trillions of dollars in home equity, life savings, and retirement accounts as a result of the financial crisis. Asked whether the homeowner aid really amounts to much, Iowa Attorney General Tom Miller, a key mover in the 2012 settlement, doesn't leave much room for doubt on where he stands. "For those people, this has been a big deal," he tells us. "Nobody else has done anything else like this in this area." Sasha Werblin, economic equity director with the Greenlining Institute in Berkley, believes that the settlements with the largest banks should be more focused on aid to homeowners, especially when it comes to minority neighborhoods and those in which English isn't the first language. "What's unfortunate about the settlement process at the moment is that it's not really intended for homeowners affected by the crisis," she says. "ere really hasn't been an instrument to make individual homeowners whole." Numbers from the Alliance for a Just Society, a Seattle-based nonprofit, give fresh urgency to her claims. According to a report titled "Wasted Wealth" it released last year, ZIP codes in which people of color were the majority counted 17 foreclosures for every thousand residences in 2012, with a loss of $2,000 on average for every household in these hardest hit communities. e study called for more principal reduction programs, estimating $7,710 in savings for every underwater homeowner nationwide and a $101.7-billion bump to the economy with the creation of 1.5 million new jobs. But other numbers tell different stories about the financial crisis—not one about lost jobs or vanquished home equity. Publishing their results in the British Journal of Psychiatry this year, researchers with the University of Oxford and a London medicine school showed definitively that more than 10,000 people committed suicide across Canada, Europe, and the United States as a result of the financial crisis and over fears about financial ruin. Numbers like those continue to breathe new life into calls for civil and criminal prosecution, with some state and federal officials reportedly relying on that anti-fraud law from the savings and loans era, FIRREA, in litigation against culpable C-suite executives. Asked whether state and federal officials should pursue a harder line against bank execs, Miller demurs, calling it a "rule of law" issue that deserves closer scrutiny only if liability can be proved. "It's hard to say that [bank executives] knew what was bad when they were jeopardizing the future of the banks themselves," the Iowa attorney general said. Prison bars and orange jumpsuits may be a stretch, but those wanting more than fines against banks don't have to look far. Bloomberg reported in August that the U.S. attorney's office in Los Angeles is prepping a civil suit against Angelo Mozilo, the discredited former CEO of Countrywide, and perhaps 10 other high-level employees formerly associated with Bank of America's notorious purchase. Gunderson counts himself among those who think the mortgage settlements are just half measures. "I believe these settlements are failing to deter matters sufficiently and protect the economy from the danger of another real estate bubble," he said. In light of their ineffectiveness in preventing another downturn in housing and their possible contribution to the slowness of the housing recovery, the question then becomes whether the imposition of penalties by the federal government, while "not insurmountable," is really in the best interest of the American consumer. Are they prudent or just petty? e recovery of the greater economy, which largely hinges on how quickly the COVER STORY M ARKET PUL SE INDUSTRY INSIGHT INDUSTRY INSIGHT What's unfortunate about the settlement process at the moment is that it's not really intended for homeowners affected by the crisis. There really hasn't been an instrument to make individual homeowners whole." –SASHA WERBLIN

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