Maputo, Mozambique (IRIN) – Mozambique’s government will again attempt to curtail subsidy expenditures for essential foods and services, but this time its approach will be more nuanced so as to avoid a repeat of the cost-of-living protests in 2010.

Antonio Cruz, director of policy analysis in the planning ministry, recently told local media that subsidies on fuel, bread and rice, estimated to cost the donor-dependent government millions of dollars each month, would be phased out by the end of June.

At least 13 people died during widespread civil unrest in September 2010 in the capital, Maputo, after the government announced the immediate ending of all subsidies, which were subsequently reintroduced in the face of the protests.

Unsustainable subsidies

On 21 September 2010 the Mozambique news agency reported that registered bakers would receive a subsidy of 200 meticais (US$6.60) for every 50 kilogram bag of wheat flour – costing then 1,050 meticais ($37.75) – they purchased.

Other relief measures included halving water connection fees for low-consumption households – considerably reducing the cost of piped water to the poor – giving free electricity to households consuming 100kWh or less, and prepaid electricity consumers would no longer pay for refuse collection.

The subsidies had been introduced in 2008, ahead of the 2009 national elections. The government said they were required to mitigate the rising cost of living for the poor in the wake of the global financial crisis.

Economic analysts warned at the time that such blanket subsidies would be unsustainable, as the long-term global trend indicated rising food prices, although there would be fluctuations at the local level.

Improved prospects

“Prices of [Mozambique's] main staple, maize, declined markedly between March and April [2011] in all monitored markets, reflecting the start of the 2011 harvest,” said the Global Food Price Monitor, published on 5 May 2011 by the Food and Agricultural Organization (FAO).

“The sharpest decreases (between 29 and 33 percent) were recorded in the surplus northern provinces of Zambezia and Nampula. Prices are lower (between 12 and 18 percent) than in April last year [2010] due to satisfactory crop prospects,” the FAO noted.

However, the price of rice in Maputo, a staple food in the area, declined slightly in April from its almost record levels in March, but “remain 16 percent above the high levels seen a year ago [in 2010]“, the FAO said.

New subsidy model

Planning and development minister Aiuba Cuereneia told the state-run newspaper, Noticias, that savings accrued from discontinuing the generalized subsidies would enable the introduction of a new food basket and transport benefits for families earning less than two dollars a day.

The new subsidy system is expected to come into effect between June and August 2011 and the first phase of the scheme, which will take place between June and December, will focus on the urban poor.

The goods envisaged in the new basket include maize, flour, rice, fish, beans, groundnuts, vegetable oil and bread, and those eligible would be identified through a “census” based on income rather than wages. Bus passes would also be issued to workers, students and the elderly.

The census is being conducted in the country’s 11 provincial capitals, but according to a recent Survey of Household Budgets, the government estimates that 1.8 million people in urban areas have a monthly income below the threshold of 2,500 meticais ($82) and would be eligible to buy the food basket, which would cost 840 meticais ($28).

In February 2011 the government warned that the country’s food security needed to be “deeply improved” after 37 percent of households were found to be subsisting on one meal a day or less during the lean season – the three months leading up to the main harvest.

Diplomatic sources, who declined to be named, said the effects of global economic uncertainty had made Mozambique’s food security situation “more precarious”, as some donor countries and aid agencies were struggling to maintain the budgetary support they had provided in the past.

Donors also embarked on a “strike”, in which budget support was suspended between December 2009 and March 2010, demanding action on electoral reforms, corruption, and the often blurred line between the state and the ruling Frelimo party, among other things.

Citing Finance Minister Manuel Chang, Noticias reported in February 2011 the government was facing a $2 billion shortfall in this year’s budget, which was earmarked to be covered by donor support and international loans.

Rural adversity

However, due to the adverse affect of the global financial crisis and projected increases in food prices it is feared some of this support may not be provided.

“The rural people in Mozambique face many challenges when it comes to ensuring they have enough food to eat, not least because our country is incredibly prone to natural disasters that can devastate crops,” said Marcela Libombo, an official in the disaster management secretariat of the agriculture department.

“In the past, farmers have reported losing 30 to 40 percent of their crop, especially maize, because of an inability to get crops [from the north] to markets down south [to the main urban areas such as Maputo, which sources food from neighboring South Africa] and a lack of storage silos,” she told IRIN.

“But the reality is our northern provinces grow plenty of food. The main problems we have relate to storage and transport infrastructure.”

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– Provided by Integrated Regional Information Networks.

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Ouagadoudou, Burkina Faso (IRIN) – President Blaise Compaoré is increasingly cornered, and must adopt a series of urgent reforms to avoid further waves of unrest in the country, say West African analysts.

In the latest uprising, police fired their guns in the air in the capital, Ouagadougou, on 27 and 28 April, and in the second largest city Bobo-Dioulasso in the west, calling for a new salary scheme, approved by parliament this year, to be implemented. This followed protests by shop-keepers in Koudougou in the center-west on 27 April, who burned the mayor’s house, parts of the local market, and the military headquarters. Earlier this month, soldiers in the capital staged protests over unequal pay.

Observers told IRIN they were not surprised by the violence, given that mounting discontent in the country had largely fallen on deaf ears.

“A crisis was to be expected,” said Alexander Ouedraogo, permanent secretary of the African Center for Strategic Studies (ACESA) in Burkina Faso. “We have seen impunity, embezzlement and senior military officers getting fat while the rest of the population suffers, but the government has not listened,” he said.

Compaoré, now also the self-appointed Minister of Defense, has pledged to meet the increased pay demands of army officers and to try to address the problems raised by trade unions incensed by the high cost of living. He is holding meetings with army officers and trade union representatives this week.

Idiatou Bah, head of political governance research at the Open Society Initiative for West Africa (OSIWA) in Dakar, said it was the first time Compaoré appeared to be “shaken”.

“Compoaré has always been West Africa’s mediator and peace-maker, but his image has been tarnished, and he now doesn’t appear to be as strong, either to his populace or to the region as a whole,” she told IRIN.

His unease is evidenced by the “dangerous move” he made in appointing himself head of defense on 21 April, she added.

Background

On- and 15 April the president’s security regiment opened fire in the presidential compound in Ouagadougou. They were then joined by two additional regiments, which took to the streets and fired into the houses of higher-ranking army officers, including the former head of the army, the then defense minister, and former chief of the army.

Soldiers called for their daily subsistence allowance to be increased from 1,300 CFA (US$2.60) to 1,500 CFA ($3), and for the military hierarchy to be dismantled.

The president then dismantled the government, and on 18 April, appointed a new prime minister, Luc-Adolphe Tiao, who pledged to meet soldiers’ demands, within the limits of the existing budget.

Since 22 and 23 March 2011, when soldiers originally took up arms, fractures between the military’s top and bottom echelons have widened, as lower-ranked officers feel they receive few of the benefits of their superiors, said Marius Ibriga, legal professor at the University of Ouagadougou.

Shop-keepers and business owners in Ouagadougou added their voice to the anger after their properties were looted or destroyed. The government promised to allocate money for damaged property.

A coalition to fight rising prices has been convened for several years, headed by Tolle Sagnon. On 8 April thousands of people marched through the streets of Ouagadougou, demanding better living conditions and an end to impunity.

The cost of living rose significantly in 2008 and has not dropped since: one liter of oil used to cost $1.77 and now costs $2.77; 1 kilogram of rice was 44 cents in 2007 and is now 94 cents, according to Sagnon. “All of our concerns have reached a tipping point, and we have explained that to Compaoré,” Sagnon told IRIN.

The coalition has also demanded that salary arrears for promotions in 2006 be met, and that healthcare consultation fees be dropped. In 2011 the government raised consultation fees at government health centers from $4 to $6. Average earnings are $1.41 per day, according to the World Bank.

Room for maneuver

The president still has room for maneuver, as long as he addresses issues of impunity and the country’s economic problems, said ACESA’s Ouedragogo. The government faces little competition from the six main opposition parties, which are not united on messaging or policy.

But Compaoré needs to undertake deeper security sector reform, said OSIWA’s Bah. “The country needs a deep security sector reform – of its army, gendarmerie and police. The security sector is too swollen, and were it cut down, the government might free up money to address other social woes.”

Rather than try to further entrench power, the president should step down in 2015, said Bah. The opposition fears that Compaoré will amend the constitution, allowing him to run in 2015.

The government must also address impunity issues, say analysts. In February, students protested against the death of colleague Justin Zongo in unclear conditions in Koudougou in the center-west of the country. While officials said he died of meningitis while in detention, students said he died of maltreatment. Two policemen were jailed over the case. Students took to the streets again in early April, setting fire to the house of the outgoing prime minister and the headquarters of the ruling party in Koudougou.

There are precedents for popular uprisings ousting a president. In 1966 Maurice Yameogo was ousted following protests by trade unions, leading to a military takeover.

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Washington, D.C., United States (AHN) – Concern and criticism are rising from abroad as difficulties of the U.S. government in controlling its debt threaten international markets.

So far this week, the Russian prime minister accused U.S. economic planners of “hooliganism” and the chief economist for the International Monetary Fund criticized Congress for lacking a “credible” plan for escaping more than $14 trillion in debt.

On Tuesday, China urged the U.S. government to take “responsible” steps to control its debt. China owns more U.S. debt than any other country.

On Monday, the credit rating service Standard & Poors downgraded the U.S. government’s credit from stable to negative.

Meanwhile, Republicans and Democrats are fighting over whether to raise the nation’s debt ceiling.

The debt ceiling refers to the highest amount of debt the U.S. government can assume under the law.

At the current rate, the U.S. government will reach its $14.3 trillion debt ceiling on May 16, according to the U.S. Treasury.

Republican leaders said again Thursday they will agree to raise the debt ceiling only if they get guarantees of drastic spending cuts for the federal budget.

Democrats are reluctant to make cuts to programs such as Medicare and Social Security, which they say are vital to many households.

The unresolved dispute prompted International Monetary Fund Chief Economist Olivier Blanchard to tell the French magazine Le Monde, “There are reasons to be worried.”

“The United States lacks a credible plan, for the medium term, to reduce its budget deficit,” Blanchard said in the magazine interview.

“The ideological gap is huge between Democrats and Republicans on how to deal with the problem,” Blanchard said.

An International Monetary Fund report last week said U.S. debt could reach 100 percent of its gross domestic product by 2015 without drastic budget cutbacks.

Even harsher criticism came from Russian Prime Minister Vladimir Putin, who said during his annual address to parliament that “everything is not so good for our friends in the States.”

The U.S. economy is teetering as a result of a huge trade imbalance between imports and exports and growing annual budget deficits, he said.

Russia does not “have the luxury for such hooliganism,” Putin said.

He also accused the United States of flooding international markets with cash that lacks value because of the high debt.

The Treasury Department is buying back $600 billion in government securities in an effort to pump up the value of the dollar.

Mexican economists say the U.S. government’s inability to control its debt will result in increased cash flow into Mexico, an appreciation in the value of the peso, volatility in its stock market and higher unemployment.

Mexico’s economic trends are closely tied to the U.S. economy.

Gabriel Perez del Peral, an American University economist, said an increased value for the peso would slow Mexico’s exports.

“The change in perspective for U.S. debt will generate a greater appreciation of currencies for emerging markets and will complicate unemployment,” Perez told the Mexican news media.

He urged the Bank of Mexico to adopt cautious policies to protect the value of the country’s currency.

“The peso’s appreciation will generate greater unemployment and the economy will overheat, which will increase commodity prices,” Perez said.

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Mogadishu, Somalia (AHN) – The transitional federal government of Somalia on Monday warned businessmen against importing and selling expired food and medicine in the country.

Speaking to journalists in Mogadishu, Sheikh Abdurrazak Mohamed Qeylow, the spokesman of the ministry of information, said the government would take strict steps against any businessmen selling drugs and food that were out of date.

“The government is to ensure the safety of the society, so it will not accept Somali businessmen to sell something could harm the health of well-being of its citizens,” Qeylow told reporters.

“Consuming expired food and medicine pose a great hazard to lives of Somali people and it may sometimes cause contagious diseases and subsequently more deaths,” the spokesman added.

He said that Somali security forces had discovered stores in Mogadishu’s international harbor full of expired foodstuffs and drugs, stating that the government will redouble its efforts to monitor shipments arriving at the seaport.

In December, Somali forces seized bags of expired maize, wheat, floor and rice at a small market in Mogadishu’s Hamarweyne neighborhood. All the seized goods were publicly set on fire.

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Lisbon, Portugal (AHN) – Ratings agency Moody’s has downgraded the credit worthiness of the Portuguese government for the second time in two weeks and warned further cuts might come.

Moody’s downgraded Portugal one bracket to a Baa1 rating from A3. Pushing Portugal’s long-term debt down toward junk bond status will make it more difficult and expensive for the country to borrow money, as it is a more risky investment now.

Uncertainty over Portugal’s government was cited by Moody’s. Among those were the possibility of debt restructuring, outstanding government debt and problems achieving deficit reduction, as well as the possibility the country might request a bailout.

This latest credit rating downgrade comes ahead a monetary policy meeting of the Governing Council of the European Central Council on Thursday.

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Gambella, Ethiopia (IRIN) – Ethiopia has little time for critics of its large-scale land-leasing policy, insisting the millions of dollars of foreign investment will create jobs, improve domestic agricultural expertise and reduce both poverty and the country’s chronic food insecurity.

The policy, part of a five-year Growth and Transformation Plan, has led to the cheap leasing of thousands of square kilometers of what the government says is mostly under-used or uncultivated land. Officially, land in Ethiopia is government-owned but occupants have customary rights.

Detractors complain of forcible relocation of local pastoralist populations, poorly paid work on the new farms, environmental degradation and a failure to deliver on promises of better infrastructure.

“I know [this] is a very controversial and hot issue at the global level. As far as Ethiopia is concerned, we don’t see it as a threat because it is smallholder agriculture, which is the driving engine of the agricultural development in this country,” Minister of Agriculture Tefera Deribew said at a recent press conference.

“We want to expand large-scale farming in areas where we have ample arable land without affecting farmers living in those areas. It will definitely support the development of smallholder agriculture,” he said.

The ministry’s head of agricultural investment, Esayas Kebede, told IRIN: “We hope that big commercial and intensive farms will solve the shortage of food in Ethiopia,” where 2.8 million people are expected to require foreign food assistance in 2011.

In at least one of the deals, a 10,000 hectare rice farm in Gambella leased by Saudi-Ethiopian investor Sheikh Mohamed Al-Amoudi, 40 percent of production will have to be sold on the Ethiopian market.

But rice, and many of the other crops set to be produced on such farms, is not widely consumed in Ethiopia.

The government and investors further maintain that the relocation of thousands of people in rural areas is unconnected but part of an entirely separate and voluntary “villagization” project designed to improve access to basic amenities.

“We haven’t evicted pastoralists from their farmland or prevented them from accessing the river,” Birinder Singh, head of marketing and logistics of Karuturi Agro Products, told IRIN.

This Indian company has leased some 100,000 hectares of land in Gambella, a sparsely populated region in the west of Ethiopia where hundreds of mostly foreign companies are investing in agricultural projects.

“That [eviction] is not our intention. We would like to hire as many people as we can on our farms and would like to be competitive in the global market,” Singh told IRIN.

Information gap

“We were not told that our land will be given to foreign investors,” said Ujulu, who used to live with his seven children on the banks of Gambella’s Baro river in an area now being developed by Karuturi, and who was recently relocated to a new village, several hours’ walk away.

“What I know is government promised us new schools for our children, health clinics, and clean water if we are to be included in the villagization program. That is why I came to this village three months ago,” he said.

A health center was under construction when IRIN visited.

The village chairman, a local government official, insisted: “We want to improve the food security situation of pastoralists. No one came to this village by force or was displaced because of the investments.”

A farmer in Oromiya state’s Karmi village, which lies near a Karuturi farm, told IRIN: “Our land was taken illegally. Even though it is unused land for agricultural purposes, it is grazing land for our cattle. Now we have very small grazing land for our cattle. We don’t know what will happen to us in the future.”

Concerns have also been raised about the infringements of pastoralists’ rights. Article 40/5 of Ethiopia’s constitution states: “Ethiopian pastoralists have the right to free land for grazing and cultivation as well as the right not to be displaced from their own lands.”

One Gambella-based pastoralist expert, who asked not to be named because of the sensitivity of the issue, explained, “These are pastoralist communities whose lives depend on grazing land, water and pasture. They have their own pattern of movement from one place to the other; hence services like water, health and school must follow the movement pattern. Otherwise it will lead to land degradation and resource depletion.”

“We are pastoralists. How can we stay here for more than three or four months?” asked one villager.

“Karuturi and the government promised us that we will get better jobs, better living conditions but so far they have done nothing other than taking our land and driving us to severe poverty,” he added.

“My community doesn’t hate the foreign companies [Karuturi] here. But we want them to be [responsive] to our problems as they have taken our land and our promises are not fulfilled,” he said.

“They are paying us very little money 12 birr [US$0.73] a day. When Karuturi Farms took our land we were promised 25 to 30 birr [$1.50-$1.80] per day. They are not paying what they are supposed to pay. We are deceived either by our government and/or by Karuturi,” he said.

A Karuturi official said the company’s pay rates were in line with national norms.

In response to charges of little oversight or regulation of the land deals, the agricultural ministry’s Esayas said: “We don’t simply give land for investment. We have conducted appropriate studies and the company [Karuturi] has also conducted an environment impact assessment (EIA). So such allegations [about evictions] are far from the truth.”

Forest burning

When there is a need for good pasture, pastoralists have traditional techniques to burn the grass and bushes without attacking the forest. But now they are surprised to see a forest burning and farms expanding day by day.

“We were told by government that we should preserve the forest and trees, because they give us rain. Now the Indians are burning and bulldozing the forest in broad daylight,” a resident of a village called Ilea told IRIN.

“Only a very small portion of the forest is burnt,” Esayas argued. “There might be investors who are cutting forests. We will follow them and take appropriate actions. Previously we have taken some measures on those investors who have damaged the environment in some way,” he said.

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Dhaka, Bangladesh (AHN) – Bangladesh has been overwhelmed by influential statements and foreign visitors expressing concern over the sacking of Nobel laureate Muhammad Yunus as head of the pioneering Grameen Bank that he founded nearly three decades ago.

The government is embarrassed when visitors in the Bangladesh capital call on prime minister, ministers and senior officials and challenge the authority for the humiliating exit of Yunus from the village bank, which empowered nearly 8 million rural women.

Robert Blake, the visiting U.S. Assistant Secretary of State for South and Central Asian Affairs, on Tuesday cautioned that if the Yunus issue remains unresolved, it will impact bilateral relations between Bangladesh and the United States.

Bangladesh media interpreted the US official’s fresh remark shifting from “should” to “must” on Yunus as a thinly veiled threat, writes online news agency bdnews24.com.

However, Foreign Minister Dipu Moni scoffed at the speculation and said the bilateral relations will continue to remain warm. She noted that Bangladesh is currently the U.S.’ 64th largest trading partner with US $4.2 billion in total trade during 2008. The U.S.’ merchandise goods trade deficit with Bangladesh was US $3.5 billion.

Responding to questions whether the U.S. position on Yunus was tantamount to interference in the internal affairs of Bangladesh, Blake said Yunus was a recipient of the American Presidential Medal of Freedom and a Congressional Gold Medal, and is widely respected in the United States, with a positive reputation among many congressmen, members of the Bangladesh Congressional Caucus, President Barack Obama and Secretary of State Hillary Clinton.

The State Department official said Yunus, a former economics professor, has brought great honor to Bangladesh, and reasserted that the United States has been “deeply troubled” by the difficulties he is facing.

Earlier, six influential U.S. lawmakers — Sens. Richard Durbin, Sherrod Brown, Michael Bennet, John Boozman, Michael Enzi and Rep. Rush Holt–sent a letter on Monday asking Prime Minister Sheikh Hasina to treat the Nobel laureate with dignity and respect.

In a concurring statement, Rep. Thaddeus G. McCotter said they “are troubled by what appears to have been a months-long effort on the part of the Bangladeshi government to discredit Professor Yunus and remove him as Managing Director while increasing government influence at Grameen Bank.”

McCotter warned that this crisis “would severely and adversely affect the cordial relations between Bangladesh and the United States.”

Visiting former World Bank president James D Wolfensohn, also a founding member of the “Friends of Grameen,” has reportedly been attempting to negotiate a settlement in the conflict between the government and 70-year-old Yunus.

The “Friends of Grameen,” an international group whose founder members also include former Irish president Mary Robinson, and former Costa Rica president Óscar Arias, also a Nobel peace prize winner, believe that the “continued attacks against the Grameen Bank and Yunus have been carried out for political reasons.”

Earlier this month, the Bangladesh Bank issued an order seeking the removal of Yunus from his position as the managing director of the Grameen Bank. The matter is currently before the superior court, which last week adjourned proceedings for two weeks.

Meanwhile, the appellate division of the Bangladesh Supreme Court last Wednesday adjourned for two weeks after an initial hearing into Yunus’ appeal of the government-controlled central bank ruling that he must give up his post because he has passed the sporadically enforced public sector retirement age of 60.

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MBABANE, Swaziland (IRIN) – Swaziland’s government, feeling the pinch of a growing financial crisis, has suspended this quarter’s pensions for the elderly and redirected the money to pay the school fees of orphans and vulnerable children (OVC).

“[Government] will utilize the funds allocated for the elderly grants, since they have R46 million (US$6.5 million) in that account currently, with a view that it shall be reimbursed timeously,” said a finance ministry report to parliament explaining how the R38 million ($5.4 million) bill for OVC school fees would be met.

The remaining $1.15 million in the account was not enough to cover the quarterly pension payout due in March and it was therefore suspended.

Deputy Prime Minister Themba Masuku told the Swazi senate earlier in March that a supplementary budget could ensure grants for the elderly might be available by the end of the month.

About 5 percent of Swaziland’s approximately one million people are 60 years old or older and eligible for pensions. Roughly two-thirds of Swazis live below the poverty line.

The pension stipends are indispensable for many of the elderly, as there is no alternative form of social security and private sector pensions are rare. The grants were increased two years ago from $21 per quarter to $85 and are paid four times a year.

But a loaf of bread costs about $1, so most people subsist on maize-meal, supplemented by wild spinach, edible herbs, emasi (sour milk) and occasionally meat.

“You cannot live on such money [as government provides] but it can help you survive,” said Gogo Khumalo, a 70-year-old widower in rural Mliba, 100km east of the capital, Mbabane.

Like many Swazi grandmothers, she is the primary caregiver of five grandchildren aged between 5 and’ years, whose mother left the homestead to seek employment in town after her husband, Khumalo’s son-in-law, died a few years ago.

Swaziland has the world’s highest HIV prevalence rate – 26.1 percent – and one in four Swazis between the ages of 15 and 49 are living with the virus.

“They tell us on the radio on the day to come [and get our pensions], and the neighbours tell me because the radio my son gave me, the battery is dead,” she said. This month the government radio service told grantees not to fetch their pensions.

Protests

Mbabane recently saw the largest anti-government protests in years, sparked by the construction of “vanity projects” like a new $1 billion international airport, built at the expense of social services.

Teachers, nurses and students made up the bulk of the 5,000 to 7,000 protesters, and the link between using the grants of the elderly – who often provide care, food and shelter for children orphaned by the AIDS pandemic – to pay for their school fees instead, was not lost on them.

“We need to set priorities. Taking from the elderly to meet the needs of OVC is stealing from Peter to pay Paul,” Solomon Thwala, a primary school teacher, told IRIN. “There are sources of funding other than putting the elderly in jeopardy.”

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Washtington, DC, United States (ProPublica) – by Paul Kiel — ProPublica

Hosts of federal agencies and regulators, along with the 50 state attorneys general, are hard at work on laying out new rules for banks and mortgage servicers. Those rules will likely require servicers to transform their approach to handling homeowners facing foreclosure.

Are you a homeowner who’s struggling to pay your mortgage? Are you seeking a loan modification through the government program? We want to hear from you.

But this wouldn’t be the first time the government tried to lay down the law. The administration’s mortgage modification program has a 170-page handbook of servicer guidelines. What’s been missing is enforcement. Servicers have broken the rules without fear of any penalties.

Will things be different this time?

The answer to that so far is…maybe. On two different tracks, government officials are developing rules that, they say, will have clear penalties attached. But crucial details remain unclear, including when these reforms will go into effect.

There have been lots of headlines lately about one of the two tracks, the negotiations to settle claims related to the largest servicers’ foreclosure abuses. The state attorneys general, together with a number of federal agencies, sent the servicers a proposal last week. The document was obtained and posted by American Banker.

The terms would require the servicers to review each struggling homeowner for a modification and provide one when doing so would bring a higher return to investors. But they go much further than that. Over 27 pages, the terms describe how a servicer should behave — just about the opposite of how they have behaved over the past couple years . It would be a different world for the homeowner seeking a modification.

In the world we live in, if you’re a customer of one of the biggest servicers, you call in to a 1-800 number and are connected with a poorly trained employee [8] who knows nothing about your file, can’t tell you why you haven’t yet received an answer after months of waiting, but then says you should fax your documents (again) to another 1-800 number, where they will likely be lost.

In the world imagined by these proposed terms, you’re never in the dark. You submitted your documents through the online portal provided by the servicer, and you can track your modification application’s progress there the whole time. The servicer responds to all your submissions and queries within a strict time frame — certainly no longer than a month. And if you do choose to call your servicer, you just ring up your specially designated contact, a well-trained employee who has handled your case from the beginning.

But this mortgage mod paradise would happen only if the terms were enforced. And there are a number of question marks. The proposed settlement says that servicers breaking the rules would face “monetary penalties,” but it doesn’t say what they are. And while enforcement would ultimately be in the hands of both the attorneys general and the newly formed Consumer Financial Protection Bureau, the proposal essentially leaves the details of how violations would be handled for a later date.

ne detail that’s been under discussion but that doesn’t actually appear in the draft settlement is language making it clear that homeowners could go to court to stop a foreclosure if the servicer violated the agreement. One ongoing issue with the administration’s Home Affordable Modification Program is that this right isn’t apparent. The program is based on contracts between servicers and the Treasury Department, but homeowners aren’t explicitly included, creating an additional legal hurdle for homeowners who go to court to address a violation of the program’s rules. “Some level of accountability from private individuals often changes corporate behavior,” Alys Cohen, of the National Consumer Law Center.

Another open question is when the settlement will happen — and when the changes will actually go into effect. The proposed terms are just the first move by the government — and there are already plenty of signs that servicers see a lot they don’t like. Speaking earlier this week, Iowa Attorney General Tom Miller said he hoped to come to an agreement within two months. The settlement also relies on the CFPB, which was formed by last year’s financial reform bill and is still in its ramp-up stage. It won’t gain many of its authorities until July .

Even after an agreement is struck, some requirements likely won’t kick in immediately, said sources familiar with the discussions. Given the sweeping changes envisioned by the proposal, servicers might be given as long as a year to meet some of the terms.

Meanwhile, while these negotiations are occurring, federal regulators are pursuing servicer reforms on a separate, but related, track. They’re considering issuing new regulations that would affect all servicers, not just the largest, and are likely to incorporate aspects of the final terms of the settlement agreement. Draft outlines produced by the two big banking regulators, the Federal Reserve and the Office of the Comptroller of the Currency, show many similarities to the proposed settlement terms. Regulators have an unambiguous authority to financially penalize banks when they break federal rules.

A person involved in the rulemaking process said the regulators hoped to produce their proposed rules by the middle of this coming summer and have them in place by the end of the year. Along with banking regulators, the CFPB and a number of federal agencies are also involved.

With the new federal rules in place, homeowners would have a much better shot at getting fair treatment from their servicer, said Kathleen Keest of the Center for Responsible Lending. (The Sandler Foundation is a major funder of both the Center and ProPublica, which operate independently of each other.)

Currently, if a servicer is threatening to wrongfully foreclose [19] =on a homeowner, the homeowner’s options to stop it are limited. First, it’s often not clear where to go to complain. For the biggest banks, the homeowner can file a complaint with their regulator, the OCC, but dozens of homeowners have told ProPublica that hasn’t been effective. The OCC has often been criticized for going easy on the banks [20]. The Treasury Department has also set up a help hotline for homeowners, but since the program is voluntary and servicers face no penalties, its authority is decidedly limited.

Once new servicing regulations are actually in place, said Keest, homeowners would be able to complain to the CFPB or their own state’s attorney general about servicer abuses. (One of the CFPB’s central purposes [16] is to be a center for consumer complaints.) Both would have the authority to enforce the new federal rules. Instead of the bank-”coddling” OCC, she said, “You’re going to a regulator whose job is to protect the consumers and not the banks, and where the states can act as a back-up.”

That’s the idea, at least. It all depends on the possible settlement and future new federal regulations.

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Chicago, IL, United States (AHN) – Pundits are dismissing as a stunt former Gov. Rod Blagojevich’s request to cancel his second trial to save taxpayer money. His retrial on charges including trying to sell President Barack Obama’s old Senate seat is scheduled for April.

Blagojevich has asked the judge in his case to dismiss the allegations against him and to sentence him immediately on the single corruption charge of which he was found guilty last year.

The former governor, who is now an indigent who qualifies for federally-appointed lawyers, said his attorneys have not been paid for nearly nine months, stymieing their efforts to mount an effective defense.

“At a time when courts and agencies around the country have been directed to freeze hiring, and jobs are in jeopardy nationwide, the use of funds on this second trial, when Blagojevich can be sentenced immediately on the standing conviction, is an imprudent use of taxpayer funds,” states the motion filed by Blagojevich’s lawyers on Wednesday.

“The financial hardship this has caused defense counsel has created a vast inequity in this case between the government and the defense,” Blagojevich explained in a statement. “The government continues to have every resource at its disposal… [we] ha[ve] not been able to rent private office space, and cannot conduct investigations or seek expert opinions.”

The 54-year-old Blagojevich was impeached in 2009 by the Illinois Senate, which voted unanimously after hearing him on federally wiretapped conversations allegedly trying to extort money from a racetrack operator.

A former U.S. congressman, he was charged together his brother, former chief of staff John Harris, and former aide Alonzo Monk for accepting political contributions from state contractors, a practice dubbed “pay to play.” The indictment included fundraisers William Cellini and Christopher Kelly, who committed suicide in 2009 after pleading guilty.

Blagojevich was found guilty in August of making false statements to the FBI The jury failed to reach a verdict on 23 other counts, including trying to sell a Senate seat.

The flamboyant father-and-son team of Sam Adam and Sam Adam Jr. had led his defense, but they withdrew from the case after the first trial, a move attributed to the amount of legal fees the former governor had spent so far.

Observers have harshly received Blagojevich’s latest motion to dismiss, calling his request a “tall order” and a “stunt.”

A former federal prosecutor, Jeffrey Cramer, told the Chicago Tribune the request is “frivolous” while a Kent Law School professor, Richard Kling, is quoted by the Chicago Sun-Times as calling it “silly.”

However, Sam Adam Jr. pointed out to NBC, “Can we have a government take away lawyers, make sure they’re not paid, go up against the federal government that can simply write the check they want, and does that mean equal protection under the laws and having competent counsel? The answer is clearly no.”

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