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CREDO Backs Up Schneiderman in Foreclosure Fraud Fight

Bank of American at Rockefeller Ceneter (photo: Odaeus)

CREDO has become the first national progressive group, to my knowledge, to back New York Attorney General Eric Schneiderman as he attempts to hold a full investigation into fraud in the securitization processes by the mortgage industry.

In an email to supporters going out today (and copied below), CREDO asks them to sign a petition that says “I support Eric Schneiderman and the state attorneys general like him who are fighting to hold banks accountable for criminal activity. Stop trying to force them to accept a broad settlement that lets unscrupulous banks off the hook.”

The Obama Administration has been pressuring Schneiderman to accept a broad settlement with top banks on foreclosure-related issues. This week, Iowa Attorney General Tom Miller kicked Schneiderman off of the executive committee that has been negotiating the settlement with the banks.

CREDO rightly points out that the robo-signing scandal which was the main impetus for the 50 state AG investigation was really just a symptom of fraud, as well as fraud itself. The real problem for the banking industry is that they committed major errors when securitizing loans, improperly creating mortgage backed securities and confusing the chain of title on millions of homes. To date, no comprehensive investigation has been undertaken to determine the scope of this problem, so that a proper punishment for breaking the private property system of the country can be meted out, in both a criminal and civil capacity.

CREDO writes:

As the Attorney General of New York, Eric Schneiderman has a unique opportunity and a unique obligation to stand up for the victims of unscrupulous Wall Street firms. And the Obama administration and federal regulators should stop trying to strong-arm him […]

Through congressional hearings and investigative reporting, we know of numerous stories of big financial firms engaging in shady mortgage practices, many of which seem on their face to violate various laws and regulations […]

. . . . [cont’d]

 

CommunityThe Bullpen

CREDO Backs Up Schneiderman in Foreclosure Fraud Fight

CREDO has become the first national progressive group, to my knowledge, to back New York Attorney General Eric Schneiderman as he attempts to hold a full investigation into fraud in the securitization processes by the mortgage industry.

In an email to supporters going out today (and copied below), CREDO asks them to sign a petition that says “I support Eric Schneiderman and the state attorneys general like him who are fighting to hold banks accountable for criminal activity. Stop trying to force them to accept a broad settlement that lets unscrupulous banks off the hook.”

The Obama Administration has been pressuring Schneiderman to accept a broad settlement with top banks on foreclosure-related issues. This week, Iowa Attorney General Tom Miller kicked Schneiderman off of the executive committee that has been negotiating the settlement with the banks.

CREDO rightly points out that the robo-signing scandal which was the main impetus for the 50 state AG investigation was really just a symptom of fraud, as well as fraud itself. The real problem for the banking industry is that they committed major errors when securitizing loans, improperly creating mortgage backed securities and confusing the chain of title on millions of homes. To date, no comprehensive investigation has been undertaken to determine the scope of this problem, so that a proper punishment for breaking the private property system of the country can be meted out, in both a criminal and civil capacity.

CREDO writes:

As the Attorney General of New York, Eric Schneiderman has a unique opportunity and a unique obligation to stand up for the victims of unscrupulous Wall Street firms. And the Obama administration and federal regulators should stop trying to strong-arm him […]

Through congressional hearings and investigative reporting, we know of numerous stories of big financial firms engaging in shady mortgage practices, many of which seem on their face to violate various laws and regulations […]

If we cave on the settlement, we send the message to giant financial firms that it’s okay to rip off millions of people and make obscene amounts of money doing so. Civil penalties will simply be part of the cost doing business, the law be damned.

The foreclosure fraud scandal has been something of a backwater, relegated to the business pages and not really in the forefront of the progressive critique of government policy. But with the housing market a lead weight on our economy, and the due process of homeowners and the rule of law itself hanging in the balance, it’s good to see a progressive group like CREDO working to make this a real national issue. It certainly is important enough to merit consideration.

The full letter is below. (more…)

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David Dayen

David Dayen