But Schneiderman may be armed with new insights after his collaboration with Steve Linick, the Inspector General at the Federal Housing Finance Authority. Also "gone rogue", Linick has had the audacity to investigate banks after the 2008 collapse in connection with their Fannie Mae and Freddie Mac dealings.
In October, Linick raised eyebrows reporting Fannie & Freddie knew of rampant problems with foreclosure methods as far back as 2003. Quoting Financial Times [paywall], Firedoglake revealed Schneiderman was given FHFA's finding on a dozen big banks obtained during a wide probe into specious securitization practices.
Linick has been stymied from making criminal referrals because the Obama/Holder DOJ has been so lax in prosecutions, but the FHFA also had a high bar of proof needed to charge fraud at the federal level, because intent must be proven. By contrast, Schneiderman needs only to prove fraud happened, invoking the Martin Act which grants state authorities greater powers because it was designed to protect the NY state pension fund from potential problems before they cause ruin.
The financial industry and their media mouthpieces now look to restore the banks' advantage in an unbelievably tangled mess, where faulty paperwork could give homeowners decisive leverage in negotiations.
The surging Occupy movement has been raising awareness of unfair foreclosure practices and the deleterious effect of money in politics, attracting younger activists to the cause. By December, almost 50 Members of Congress responded, backing a bill seeking immediate investigations by state AGs instead of this immunity deal. About a year earlier, Maxine Waters led 31 members of Congress in urging the administration to investigate the robosigners, but was summarily ignored.
Now on the campaign trail, Obama is promising to restore fairness to a middle class besieged by lopsided policies, but the President was criticized for lip service and a "show" crackdown in recent weeks, going after CEOs at Fannie/Freddie while blatantly overlooking Wall Street's criminal enterprises.
For New Yorkers concerned with this issue, we recommend you contact Schneiderman's office at http://ny.ag.gov or find your state AG here, but above all, write President Obama who "is committed to creating the most open and accessible administration in American history".
[Update] (J22)For more background, see my comment below.
[Update II] (J23) While updates on radio news continued to announce a deal is getting closer, a new WSJ piece entitled "Obama faces Heat From Left on 'Robosigning' Talks" quotes lead negotiator AG Tom Miller of Iowa as backing off, saying "we won't reach a settlement any time this week".
Noting both Sen. Sherrod Brown and MoveOn.org has taken up the cause in petitions and protests of Obama campaign sites (!), the WSJ seems to have overlooked Brown's point - the settlement reportedly will allow banks to use write-downs to transfer some of the losses to investors, including state pension funds:
"The proposed principal reduction program must focus on banks settling with their own money, rather than shifting their financial liability to Private Label Securities (PLS) trusts."
Naked Capitalism also fleshes out this investor-fleecing plot, adding other valuable ruminations - for example describing overtures Obama may be making overtures to "favored" state AGs to ensure they don't join the Schneiderman Six.
Tom Perrelli, the #3 at DOJ intimately involved in the talks announced he will be stepping down in March.
[Update III] (J24) NYT adds: Rep. Brad Miller of NC joined Sen. Brown in seeking greater accountability, but that state and federal officials gave assurances any deal would release banks from civil liabilities only and not criminal charges.
NPR ran a story about the falling out between Schneiderman and lead negotiator AG Tom Miller of Iowa, who claims Schneiderman left the 50 AG panel voluntary and misunderstood that there never was an offer for blanket immunity.
NPR also got Schneiderman's take on Occupy Wall Street protests, noting "he agrees with some of the message" because "this was a man-made catastrophe" and those who caused it are out there. With a dozen investigators on the case, Schneiderman claims they have been "finding really some interesting evidence of misconduct".
Businessweek is reporting Delaware is out of the deal as it stands after AG Beau Biden rejected it without comment. Baltimore Sun writes that Campaign for America's Future has joined MoveOn, whose petition drive gathered 430,000 signatures so far.
The co-chairs of the Congressional Progressive Caucus, Keith Ellison and Raul Grijalva joined AFL-CIO President Richard Trumka asking Obama to investigate, not settle.
Update IV: (J28)In a shocking revelation, President Obama announced in his SOTU speech he would seek accountability in the foreclosure crisis, appointing none other than Attorney General Eric Schneiderman as co-chair of a new Unit on Mortgage Origination and Securitization Abuses seeking to "vigorously prosecute" financial crimes which caused the economic crash of 2008.
FDL's Daren Dayen is skeptical, predicting co-chairs Lanny Breuer and Robert Khuzami of the SEC maintain secret sympathies for the banking industry and will dilute the efforts of the panel to steer it right back towards the immunity settlement. Another co-chair is the DOJ's Tony West the brother-in-law of CA AG Kamala Harris, feeding Dayen's sentiment that Schneiderman and West are simply being brought in to the tent where they can be nullified.
Conversely, Sam Stein of HuffPo believes Schneiderman's presence in UMOSA will give it badly needed legitimacy. Already he has been interviewed by Rachel Maddow, who asked why Obama took so long. Schneiderman says Obama "came to understand" the need to prosecute.
Maddow also played a clip encouraging homeowners to lawyer up or squat to resist or reverse foreclosures because bank paperwork is so widely, royally screwed up. See video here. Credit Maddow for exploring this issue first when she had Schneiderman on back in October.
(OpEdNews Contributing Editor since October 2006) Inner city schoolteacher from New York, mostly covering media manipulation. I put election/finance reform ahead of all issues but also advocate for fiscal conservatism, ethics in journalism and (more...)
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