Obama to Attorneys General on Mortgage Fraud: Don’t Do Your Job
We complain and complain but now here is something we can actually do.
It broke in Monday’s NY Times that NY Attorney General Eric Schneiderman said “not so fast” as the Obama Administration sought to whitewash mortgage fraud, pushing for a settlement that includes fines but no fraud or criminal investigations for the major banks who intentionally sold toxic securities and “robosigned” foreclosures.
AG Schneiderman is doing his job, exploring whether some people might need to go to jail for fraud in lending, securitization practices, foreclosure documents or home seizures.
A quick ‘immunity’ settlement was sought by Treasury Secretary Tim Geithner, but the White House also dispatched HUD secretary Shaun Donovan and Eric Holder’s DOJ, according to the Times, because “the poor homeowners” need the money fast. In fact, the banks first, worst offers put $5-8 billion towards over $170B in underwater mortgages to purchase get-out-of-jail-free cards for everyone involved. Industry watchers told Huffington Post the payment should be more like $20B or $30B plus structural changes.
Ironically, it was HUD, under Donovan that concluded audits in May showing the lenders violated the False Claims Act, defrauding US taxpayers as well. They referred criminal charges to the DOJ – so why are HUD and the DOJ rushing to make it all go away?
By contrast, New York elected a responsible, accountable Attorney General last fall, who has earned praise from progressive groups around the state for bold stances on hydrofracking safety against Governor Cuomo and finance industry corruption.
An AG’s job is to investigate and prosecute crimes, but unlike the other Eric, Attorney General Holder, New York does not want to “look forward” in complete blindness – we have learned from the Bush years that you cannot fine away illegal behavior, only jail time seems to work.
Obama should be called out when he “buys in” to crimes and frauds by negotiating fines or “haircuts” in exchange for loan modifications – this allows homeowners to be used as hostages by banks. Schneiderman believes the fraud victims and the taxpayer would see much better deals if some bankers were indicted.
This debt is evidence, proof of billions laundered after being obtained criminally – another example of how Obama did not “change” Bush policies. The Bush administration settled a major international bribery scandal with Halliburton/KBR by accepting a staggering $579 million through a Foreign Corrupt Trade Practices “pay off”. This had the cumulative effect of legalizing bribery through SEC fines.
This “settlement” took former CEO Dick Cheney off the hook in the US, and also bought top-level diplomatic support for quashing the indictments in Nigeria and Europe, with none other than George H.W. Bush and his former Secretary of State James Baker dispatched to pressure foreign officials to drop all charges – and magically, the story never hit the major networks.
Doomed to repeat history, we now see Obama following suit, securing “understandings” between financial giants Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc. and the accused fraudsters at Bank of New York Mellon who knowingly sold time-bomb mortgage securities containing fraudulent sub-prime dogmeat acquired from Countrywide.
This comes just as campaign donation season is coming into bloom, and as Bank of America staff was reported to have been overheard whispering sweet nothings into Rick Perry’s ear.
If you are seeking justice for victims of the US economic collapse, send Schneiderman a note now. If you are a fiscal conservative or even a tea party supporter, tell the banks they cannot use tax money in bailouts anymore – it’s time to show personal responsibility.
If you saw Michael Moore’s “Capitalism: A Love Story” and wonder why no one has still gone to jail for destroying the US economy, this is the time to speak up.
Schneiderman’s staff gave me these as the best contact points. Share this widely and add your two cents (while you still have it).
E-mail form here: http://www.ag.ny.gov/online_forms/email_webmaster.jsp
Phone number here: (518) 474-3527
Twitter here: @AGSchneiderman
Direct email: eric.schneiderman (at) ag.ny.gov
Send a letter or postcard here:
Office of the Attorney General
Albany, NY 12224-0341
*Update: (Tuesday 8/23) New York’s AG was just booted from the multi-state committee negotiating a broad settlement with five of the country’s biggest mortgage servicers after he objected to the immunity deal they arranged in exchange for loan writedowns.
Iowa Attorney General Tom Miller would not elaborate why, even after being pressed, other than to say Schneiderman’s call for justice was undermining the group, and “simply doesn’t make sense, is unprecedented and is unacceptable”.
But we learn Schneiderman was not alone – Martha Coakley in Massachusetts, VP Joe Biden’s son Beau Biden in Delaware and Catherine Cortez Masto in Nevada also wish to preserve the right to investigate, according to Bloomberg’s BusinessWeek.
Schneiderman’s office vowed this will not deter the efforts to prosecute criminals, saying “the American people deserve an investigation” into “origination and securitization practices before any broad immunity is granted”.
*Update: (Weds 8/24) California Attorney General Kamala D. Harris is also considering joining Schneiderman and the other three AGs in a wider fraud probe after forming a state task force in May (LA Times). Contact her office here.
Crossposted from OpEdNews
Letters, We Get Letters:
Dear Mr. Wynn, the following is a copy of my letter to my Attorney General in California
Dear Attorney General Kamala D. Harris:
Please do join the Attorney Generals of New York, Massachussets, Delaware & Nevada in a wider fraud probe of mortgage lending, securitization practices, foreclosure documents & home seizures. You and the other four state AGs appear to be the last hope that even a small portion of justice might be done to those responsible for the crime of the century. Those who take a stand and persevere will obtain honest citizens’ eternal gratitude; do not sell out please rise to the challenge, the sell-outs will be remembered as being downright corrupt.
R. S. Heckmann, Arcadia, CA
Mr. Wynn: Thanks for the information & the links. A link to your article was forwarded to me on the listserv of the National Association of Consumer Bankruptcy Attorneys by bankruptcy attorney O. M. Gardner of Shelby, NC, who has fought unlawful mortgage-related practices tooth & nail.