• With: Rep. John Garamendi, D-Calif.

    This is a rush transcript from "Your World," February 6, 2012. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST OF “YOUR WORLD”: Well, its deadline day for a new mortgage rescue deal. States must decide today if they are signing on to it or not. It’s to take millions of dollars from banks accused of foreclosure abuses.

    California was holding out, but reports are out today that the White House is pushing it to jump aboard, a move that would add billions more to this settlement.

    To California Democratic Congressman John Garamendi.

    Congressman, where does this stand right now?

    REP. JOHN GARAMENDI, D-CALIF.: Well, I think it is up in the air right now.

    But that was a very good interview you had with Mike. He really laid it out very clearly.

    With regard to this issue of the settlement, we really don’t know how this is going to come down. Our attorney general out in California has been very, very clear that she thought the original proposal was just not right, wasn’t enough, and really didn’t hold the banks and mortgage companies accountable for what they had done. It’s $25 billion, but what is the rest of the story?

    Some of those folks ought to be in jail. They ripped this country off to a fare-thee-well. And what about additional prosecutions? Is there anything more that will happen? Or are they just going to get an out-of- jail-free card and move on? That is a big question. We don’t know the answers at this point.

    CAVUTO: From what I understand, Congressman, a lot of these banks are saying, we might embrace this new mortgage plan, but we cannot fight two pricey wars at the same time, the billions in fees we will have to pay to pay for this and then protracted litigation from a meltdown that occurred four years ago.

    Is it that simple?

    GARAMENDI: Well, certainly not that simple at all.

    These banks are raking in multibillion-dollar profits, and there is more than enough money in their profits alone to pay for a settlement, a substantial settlement. And beyond that, individuals ought to be held accountable.

    (CROSSTALK)

    CAVUTO: So, the two -- you are saying the two shouldn’t be linked, right?

    GARAMENDI: That’s correct. They ought not be linked. They ought not be let go simply because they put a lot of money on the table.

    I suspect that $25 billion is less than the bonuses paid by the major banks.

    CAVUTO: Well, I suspect that is probably not quite right. But...

    GARAMENDI: Well, give me the number, and we will see. I will bet it is not too far away by the time you add it all up.

    CAVUTO: But, Congressman, in the end, let’s say we get past this and they do agree to this mortgage plan. How would this one be any different from any of the other rescues that barely moved the needle and just protracted the pain and agony?

    GARAMENDI: Well, that is where we have to and the president has been trying to get to a solution to help the homeowners. Ultimately, yes, the big banks ought to be whacked; they ought to be whacked real hard. But the ultimate solution lies with the individual homeowners. They’re the ones that are suffering. They’re already -- many of them have already lost their home, they are unemployed, and they have lost the American dream.

    That American dream needs to be restored. Part of that restoration and the reigniting of the American dream comes in getting this housing market back on its feet. Those homes that are underwater are only going to get worse, as more and more houses go into foreclosure.

    So, we want to put the brakes on the foreclosure. That is what the president is trying to do. He said this in the State of the Union address. And we will see if we can get it done here in Congress. But, as you know, as you just heard Michael Reagan say, this is a political season, and people are often wrestling with things other than what is good for the homeowners of America.

    CAVUTO: Or they could be looking at prior cases that just did more than harm than help, right?

    GARAMENDI: I don’t know. Which one would you be talking about, Neil? I’m not aware of one that actually didn’t...

    CAVUTO: Half-a-dozen -- half-a-dozen mortgage relief programs, and we still have a mortgage mess.

    GARAMENDI: Well, they didn’t do the full task.

    CAVUTO: Right.

    GARAMENDI: There’s no doubt that programs over the last three years didn’t -- were not enough.

    And the president continues to try to ramp up and bring forward additional programs...

    CAVUTO: All right.

    GARAMENDI: ... and to beef up the ones we have.

    It is worth all of our effort, really, for all of us to get behind this and try to make these new ideas work.

    CAVUTO: All right, Congressman, thank you very much.

    GARAMENDI: Neil, you have a good day.

    CAVUTO: You, too.

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