Many consumer advocates and direct-action groups have been dismayed at the fraying of the 50 state AG investigation into foreclosure fraud. Initially this was seen as the best opportunity to see real action on the banks, and the Attorneys General at the head of the probe were well-liked and respected. But to date, no real investigations of servicer practices have been undertaken; the investigation seems like a pretext for the banks to negotiate a resolution. And Tom Miller, the Iowa Attorney General leading the investigation, has backed off a previous statement about putting people in jail, instead preferring a civil and not criminal resolution that has the potential to be ineffective at stopping frauds upon state courts and other crimes.

The growing community that has sprouted up to fight the foreclosure crisis senses that they need to put pressure on the AGs to get a real investigation and a meaningful solution. This Thursday, they will hold a naitonal call-in day to AG offices across the country, coordinated through the website Crime Shouldn’t Pay. Here’s their call to action:

Are you sick of the big banks continuing to reap big profits from the damage they caused to our homes, families and communities? If so, join with thousands of people on Thursday, February 3 to call your state Attorney General and demand a strong and meaningful settlement against the big banks.

The nation’s 50 state Attorneys General are currently investigating the fraudulent mortgage practices of the big banks The big banks are pressing for a quick settlement that will let them off the hook for their crimes and keep the process behind closed doors and so we need to fight back. Just a few minutes of your time will send a message to the Attorneys General that we’re watching their work closely and we won’t settle for anything less than deep penalties for the big banks and justice for millions of homeowners.

Crime Shouldn’t Pay was put together by a coalition of groups like National People’s Action and PICO. Their belief is that the banks are putting pressure on the AGs in one direction and that they need to do it from the other direction. The campaign seeks to leverage social media and get the word out to all allies.

It’s a bit unusual to direct a call-in campaign at Attorneys General, but they all have signed on to protect the rule of law, and Democratic or Republican, they need to uphold that. It’s not necessarily a lost cause. The Republican AG in Michigan, Bill Schuette, is suing Countrywide to recover $65 million in state pension funds on mortgage-backed securities. Basically he’s doing a repurchase strategy, which many investors have tried. That suggests that Schuette knows something is deeply wrong in the housing markets and that a solution must be forced upon the banks.

David Dayen

David Dayen