There was one little-noticed part of this week's announcement about the $25 billion national mortgage settlement. North Carolina's banking commissioner, Joseph Smith Jr., will serve as an independent monitor, overseeing the five banks that agreed to new mortgage loan servicing and foreclosure standards.
Smith, who has spent nearly a decade as North Carolina's commissioner of banks, is described as a man who understands the plight of the homeowner without forgetting what makes a successful banking industry work.
"Joe is tough, he's thorough and he's fair," says Roy Cooper, the state's attorney general.
Cooper was a lead negotiator in the multibillion-dollar mortgage settlement with Bank of America, JP Morgan Chase, Wells Fargo, Citigroup and Ally Financial. Cooper, who recommended Smith for this new job, says the agreement has big teeth and needs a tough watch dog, someone like Smith.
"He has experience of knowing how banks operate," Cooper says. "These issues are intricate and complicated, and it is important we have someone who understands how things work. At the same time, as the North Carolina commissioner of banks, Joe Smith has a strong consumer protection record."
No one knows the exact details of Smith's new job. Since the mortgage crisis, he's spent much of his time defending consumers.
While commissioner of banks, Smith supported the fight to end pay-day lending and helped set up one of the country's first foreclosure prevention counseling programs.
"First of all, sir, if I might say so, we've just had a financial meltdown under subprime," Smith told the House Financial Services Committee in 2009. "The states were all over subprime for years. No one has ever said to my knowledge that the state regulation caused the subprime crisis. In fact, if anything, the state regulation was on top of the subprime crisis before anybody else."
Smith's office declined to make him available for an interview.
Smith knows his way around the nation's capital and has worked in Washington before, but it's also not the first time the Obama administration has called him for help. About a year ago, President Obama nominated Smith to run the Federal Housing Finance Agency that regulates mortgage giants Fannie Mae and Freddie Mac.
Smith withdrew his nomination after resistance from Senate Republicans, but now he's stepping forward again.
John Connaughton, a professor of financial economics at the University of North Carolina at Charlotte, says he would not want Smith's job. He says it is going to be a brutal process.
"Whenever we have a settlement like this ... nobody ever gets what they want," Connaughton says. "It is always a series of compromises, and as a result of that, he is going to be dealing with parties on both sides of the issue that feel they have been unfairly treated."
The West Virginia native won't return to D.C. to oversee the mortgage settlement. He'll set up an office in Raleigh with a team of auditors and attorneys to help with the process of divvying up the $25 billion.
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