Protesters Gear Up as Foreclosure Settlement Nears

Some activists are calling for a more thorough investigation into the misdeeds of big banks.

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As state and federal officials hammer out the details of a settlement designed to address fraudulent foreclosure practices, some homeowners and activists are saying it's just not enough.

Protests flared up in Chicago Monday where officials were meeting, with activists demanding the government launch a more thorough investigation into the foreclosure actions taken by big banks. Activists chanted "banks got bailed out, we got sold out," according to Reuters, while others held signs that said "Make Wall Street Pay" and "President Obama investigate banks now."

There seems to be some hope for the prospect of a deeper investigation. Rumor has it President Obama will address the ongoing negotiations in his State of the Union Tuesday.

"There seems to be evidence that he may do something and we hope the 'something' is launching a wider investigation," Sen. Sherrod Brown, (D-OH) said in a conference call Monday.

Kristiane Chappell, whose disabled mother faces eviction in March, says the Chicago protesters are spot on.

"They absolutely should be taking a hard line," Chappell says. "[Banks] should be held accountable. The majority of Americans' net worth is in their home, so by dropping their net worth, they've essentially bankrupted all these people in a way. It's gone. That's everything they have."

Chappell plans to submit a petition to her mother's mortgage servicer Tuesday, First Mortgage, asking the company to participate in a federal principal reduction program designed to help at-risk homeowners stay in their homes. Currently, participation in the program is optional.

"This is our last hurrah," Chappell says. "HUD has put in a hold [preventing eviction] until March, but that's all we have."

[Read: Mitt Romney Hits Newt Gingrich on Freddie Mac Profits.]

While significant, Chappell and her mother's struggle is only a fragment of the nationwide situation. Almost 11 million Americans are underwater on their mortgages and in danger of having their homes foreclosed on, according to some estimates.

"What is at stake here is the rule of law," Simon Johnson, former chief economist at the International Monetary Fund, said in a conference call Monday. "Big banks are accused, based on plausible evidence of having broken the law and having mistreated millions of homeowners. This needs to be investigated fully and a settlement needs to be reached and that should be comprehensive."

"Don't do a deal on robo-signings or some blanket immunity for the banks—that makes no sense," he added.

mhandley@usnews.com

Twitter: @mmhandley

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