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Biden, Obama, Boehner at SOTU
President Obama delivers the State of the Union address,
flanked by Vice President Joe Biden and House Speaker John Boehner
In last night's State of the Union, President Obama announced a mortgage crisis unit that includes federal and state officials to investigate wrongdoing by banks related to real estate lending. Sam Stein at Huffington Post got the early details.
The office, part of a new Unit on Mortgage Origination and Securitization Abuses, will be chaired by Eric Schneiderman, the New York attorney general, according to a White House official. [...]

"The goal of this joint investigation will be threefold: to hold accountable any institutions that violated the law; to compensate victims and help provide relief for homeowners struggling from the collapse of the housing market, caused in part by this wrongdoing; and to help us finally turn the page on this destructive period in our nation’s history," reads a White House document outlining the objectives.

"This is a big achievement and something the entire progressive advocacy community wanted [with respect to] housing policy," added the White House official.

The unit will not supersede the efforts already underway by the Department of Justice. Instead, it will operate as part of the president's Financial Fraud Enforcement Task Force. In addition to Schneiderman, the unit will be co-chaired by Lanny Breuer, assistant attorney general at the Criminal Division of the Department of Justice, Robert Khuzami, director of enforcement at the SEC; John Walsh, a U.S. attorney in Colorado, and Tony West, assistant attorney general in the Civil Division at DOJ.

That last paragraph is where one of the rubs is: This investigation will run in parallel with—and not supersede—the existing and thus far toothless existing investigations. So it's unclear whether the new unit can go any farther than what DOJ has be willing (or unwilling) to do thus far, and whether this is another layer of bureaucracy that amounts to just so much window dressing. That's one of the worries of David Dayen, who's been covering this story comprehensively.

First of all, this becomes part of a three year-old Financial Fraud Task Force which has done approximately nothing on Wall Street accountability outside of a few insider trading arrests. So that’s the context of this investigative panel, part of the same entity that has spun its wheels. Second, the panel would only look at origination, where there have been plenty of lawsuits and where the main offenders are all out of business, and securitization, which may aid investors (that includes pension funds, of course) but not necessarily homeowners. Third, let’s look at the participants on this 5-member panel, which sounds to me like the absolute worst way to handle an investigation (you put an independent prosecutor in charge with a budget and subpoena authority if you really want to get something done, not a committee).

Another looming question is what this new unit means for the maybe, maybe-not imminent settlement between the banks and at least of handful of state attorneys general, the settlement that up until now Schneiderman has been strenuously opposed to. Felix Salmon suspects that this will push the settlement back, yet again, is likewise somewhat pessimistic on what this new unit could achieve: "So expect the status quo to continue, probably through 2012: banks with huge contingent legal liabilities hanging over their heads and their stock prices, and the government holding back on prosecutions as it attempts to cobble together a global settlement."

On the other hand, don't miss Mike Lux's post here at Daily Kos. Mike has been a forceful opponent of the proposed settlement, and critical of the administration for pushing this sweetheart deal for the banks on the states. Mike's truly encouraged, and optimistic.

Ultimately, victory can’t be declared until the banks actually move several hundred billion in mortgage writedowns, and some indictments are issued. But the task force announcement yesterday was a very big deal, one that progressives can and should be celebrating. We asked the administration for a bigger, broader, deeper investigation, and it looks very much like we got it. Now we have to keep doing that accountability thing, and make sure justice really is done.

We did ask for it, and this is a much better outcome than what many progressive groups thought was going to come out of the State of the Union—an announcement of a crappy settlement providing blanket immunity for the fraud of the banks and inadequate homeowner relief. This was certainly better. We'll know how much if and when some indictments get handed down.

Originally posted to Joan McCarter on Wed Jan 25, 2012 at 11:46 AM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  too bad AG ES isn't the Chair of this commission (12+ / 0-)
    you’re right, critics of yours from the left–people like me–love the idea of NY Attorney General Eric Schneiderman chairing a “special unit to investigate misconduct and illegalities that contributed to both the financial collapse and the mortgage crisis” that would be “part of a new Unit on Mortgage Origination and Securitization Abuses.” But that’s not what you’re announcing, at least as described by Sam Stein for the HuffPo.
    Schneiderman isn’t chairing anything. He’s Co-Chairing. That’s a huge difference. If he’s Chair he’s in charge. If he’s Co-Chair he needs consensus. And who is he Co-Chairing with? Four people, starting with Lanny Breuer. That’s unacceptable. (emphasis mine)
    The reason we want Schneiderman in charge of prosecuting is because Breuer, who heads the Justice Department’s Criminal Division, hasn’t done his job. If he had pursued these prosecutions we’d have a lot more justice in this country right now than we do....

    without the ants the rainforest dies

    by aliasalias on Wed Jan 25, 2012 at 11:56:48 AM PST

    •  I forgot the link (12+ / 0-)

      http://news.firedoglake.com/...

      And btw,

      There’s Already a Financial Fraud Task Force

      http://news.firedoglake.com/...
      The thing is, and this is something that Seder, a fairly close observer of these matters, didn’t know, is that there’s already a financial fraud task force. In fact, this Unit on Mortgage Origination and Securitization Abuses will be part of said Financial Fraud Task Force. That originated in November 2009, based on legislation from Congress. They have a website and everything. It’s self-described as “the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.”
      The task force has had a mandate to investigate and prosecute financial fraud for well over two years. So what has been done? They’ve done some work on insider trading. And they’ve gone after a number of small fish who engaged in penny-ante mortgage fraud schemes. Has one Wall Street banker at the top been prosecuted? No. And in general terms, most of the civil fraud prosecutions have ended with these no-fault agreements, where the guilty party doesn’t have to admit “alleged” wrongdoing and can just buy their way out of the problem. This is the practice that Jed Rakoff rapped the SEC for partaking in.

      without the ants the rainforest dies

      by aliasalias on Wed Jan 25, 2012 at 12:23:45 PM PST

      [ Parent ]

    •  According to David Dayen, (6+ / 0-)

      who is usually spot on in his political analysis, Obama's Mortgage Crisis unit appears to be a scam designed to defang Schneiderman and a handful of other AGs who were investigating mortgage fraud:

      The Schneiderman Gambit: Financial Fraud Unit Appears Designed to Fail, and Grease Skids for Foreclosure Fraud Settlement

      The unit will be co-chaired by Eric Schneiderman, the New York Attorney General who bravely waged an often lonely battle to stop a misguided settlement on foreclosure fraud. But “co-chair” is the operative word here, and it suggests that the entire maneuver was created to grease the wheels for the pre-arranged settlement, while turning this investigatory arm into nothing so much as regulatory theater...

      First of all, this becomes part of a three year-old Financial Fraud Task Force which has done approximately nothing on Wall Street accountability outside of a few insider trading arrests. So that’s the context of this investigative panel, part of the same entity that has spun its wheels. Second, the panel would only look at origination, where there have been plenty of lawsuits and where the main offenders are all out of business, and securitization, which may aid investors (that includes pension funds, of course) but not necessarily homeowners. Third, let’s look at the participants on this 5-member panel, which sounds to me like the absolute worst way to handle an investigation (you put an independent prosecutor in charge with a budget and subpoena authority if you really want to get something done, not a committee). ...

      This is a classic Obama move, putting a threat or a rival inside the tent. It happened with Elizabeth Warren and David Petraeus and Jon Huntsman, and it’s happening again. It divides the coalition against a weak settlement, which will at the least shut down state and federal prosecutions on foreclosure fraud and servicing issues. It puts hopes in yet another investigation, one with little chance for success.


      Always with Obama, whenever he 'says' something that sounds like it helps the 99%, the environment or civil liberties, one must always be sure to read to fine print.

      "It depends what the meaning of 'is', is"
      Platform of the "New" Neoliberal Democratic Party
      Speaking out of one side of their mouth for the little guy, their nominal constituency, and the other for the plutocracy, their real constituency.

      by Sanctimonious on Wed Jan 25, 2012 at 02:49:54 PM PST

      [ Parent ]

  •  Ok Obama bashers, lets hear from you on this (3+ / 0-)
    Recommended by:
    agnostic, howd, Jerry J

    because this is one of the times I agree.

    This should should have been done a long time ago.

    Of the list of disappointments, failure to come up with a good plan to deal with the foreclosure crisis in a timely and effective way is No. 1 on my list, although I admit that I don't know exactly what that plan should have entailed.

    I don't believe crimes were committed in this fiasco and that is the biggest problem. Much like Mittens' tax returns are not illegal, but they are wrong, the law is the problem here.

    This appears to be a political move to satisfy the base and won't really help much and won't IMO lead to any significant convictions.

    This administration has been a day late and a dollar short on this issue.

  •  dday and bbb are in agreement: (15+ / 0-)

    http://www.dailykos.com/...

    This looks like PR to me more than anything else. Certainly doesn't look like a prosecution office. Breuer and Khuzami aren't exactly balls to the wall litigators. To say the least. I also noticed there was no Special Agent assigned to it, meaning that any investigative work will probably go through the notoriously moribund SEC. Finally, I don't see a budget here.

    In other words, this is far different from the sort of Kenneth Starr like independent counsel (i know i know...there is no statutory authority) operation. Moreover, I see that mafia prosecutor Bharara was left out of the loop as well as Cyrus Vance. Of course Vance wouldn't do anything if you threatened his life. And Bharara knows nothing about this sort of thing and is a Schumer toadie anyway.

    What you'd really need is the U.S. Attorney's office in cooperation with the FBI, NY AG, and the Manhattan DA if you really wanted to get serious.

    Yo.

    by brooklynbadboy on Tue Jan 24, 2012 at 09:43:22 PM EST

  •  It does smack of election year window dressing (13+ / 0-)

    But ...

    Effective election year window dressing will have to include some newsworthy results. Otherwise it's one paragraph in an hour long speech that the voting public will little note nor long remember.

    So - assuming nothing about Obama other than that he's a canny politician - I expect at least some progress in bringing Wall Street to justice. Less than we'll want; more than we've gotten thus far.

    Thus sayeth my tea leaves.

    In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra En théorie, il n'ya aucune différence entre théorie et pratique, mais en pratique, il ya toujours une différence. - Yogi Berra

    by blue aardvark on Wed Jan 25, 2012 at 12:06:42 PM PST

    •  Your tea leaves are correct. (1+ / 0-)
      Recommended by:
      blue aardvark

      It also takes time to put such cases together so we'll get the easy ones (DOJ was probably already working them) before Nov.
      As to why Obama didn't do this earlier...it might well have affected a fledgling recovery, cost jobs and been unpopular with Indies.  He also had bigger fish to fry b4 getting to this (like Civil Rights and ending a war) and leaving office without having achieved them.  These kinds of things are important but death and civil rights are forever.

      "Stupid fucker."- Erica Zwick (FB poster referring to Newt Gingrich).

      by rainmanjr on Wed Jan 25, 2012 at 01:54:58 PM PST

      [ Parent ]

      •  I'm not sure how proscecuting banks would be (3+ / 0-)
        Recommended by:
        blue aardvark, aliasalias, emal

        unpopular with independents.  Prosecuting bank fraud in this political climate seems like a no brainer in terms of public support.  There is massive public support for this and if we see some serious prosecutions start before the elections this will easily win Obama the election.

        There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

        by AoT on Wed Jan 25, 2012 at 02:09:58 PM PST

        [ Parent ]

        •  Hurting the economy was unpopular (1+ / 0-)
          Recommended by:
          virginislandsguy

          People wanted to see the banks punished, yes, but they didn't want to cut off their nose before their face was ready.  Banks were necessary for recovery so Obama had to tread carefully.  But the economy is starting to gain steam and this is a good election year issue so a good time to give it some attention.  Notice he isn't shutting them down but will go after the more blatant thieves.

          "Stupid fucker."- Erica Zwick (FB poster referring to Newt Gingrich).

          by rainmanjr on Wed Jan 25, 2012 at 02:19:50 PM PST

          [ Parent ]

          •  I don't think going after banks like (1+ / 0-)
            Recommended by:
            aliasalias

            Goldman Sachs would have hurt the economy horribly, and it would have been extremely popular.

            There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

            by AoT on Wed Jan 25, 2012 at 02:38:45 PM PST

            [ Parent ]

            •  We bailed out GS b/c... (0+ / 0-)

              they were too big to fail.  Why would we then go after them before the economy began recovering?  That's kind of counter-effective.  Like it or not, GS has a great deal of say in our economy and many people, including those who favored such a move, would have regretted it.  There is a time for everything and GS will undoubtedly get theirs.

              "Stupid fucker."- Erica Zwick (FB poster referring to Newt Gingrich).

              by rainmanjr on Thu Jan 26, 2012 at 01:21:52 PM PST

              [ Parent ]

  •  Optimism is not the correct reaction imo, (17+ / 0-)

    for reasons I tried to explain in the diary above this one on the side list. I started writing it as a comment to Mike's diary, but it got so long, I made a diary out of it.  

    In short, the administration has put the same people in charge of this who have done nothing to date while involved with this task force, there are massive conflicts of interest involving two of them, and the administration has not abandoned its desire to settle claims against the banks for chump change while letting the banks off the hook for trillions in potential liability.  Meanwhile, during more than a year of settlement negotiations, the so-called 50-state AG task force did not take one deposition or issue one subpoena.  So they have no idea what the value of the settlement should be.

    I have no trust that all the above is changed since last Monday, when the administration was still trying to push the AGs to settle.

    •  Gonna Believe Me or Your Lying Eyes (5+ / 0-)
      Recommended by:
      AoT, 2laneIA, emal, timethief, magnetics

      Yeah, I'm getting kinda tired of having people tell me to ignore all of what I am seeing and go with what I am being told.

      And that was before I knew this:

      the administration has put the same people in charge of this who have done nothing to date while involved with this task force, there are massive conflicts of interest involving two of them

      Or this:

      the so-called 50-state AG task force did not take one deposition or issue one subpoena.

      I think I will go with what I see, rather than what I am being told.

      Poor man wants to be rich. Rich man wants to king. And the king ain't satisifed until he rules everything. B.Springsteen

      by howd on Wed Jan 25, 2012 at 01:50:00 PM PST

      [ Parent ]

  •  Hope they figure it out - no principal reductions (1+ / 0-)
    Recommended by:
    PsychoSavannah

    It is a very tough problem to address.  Options include subsidizing lower interest rates, subsidizing rent for those that can't keep up with the mortgage, make the short sale process easier.  A very very bad idea is to offer principal reductions.  This is inherently unfair to those who made large down payments, those that didn't take out seconds, paid extra to principal etc.  It is also ripe for fraud because many will try to game they system.  The Prez and his crew are pragmatic and I hope they see the danger in this approach.  Wish them luck becasue Congress isn't in any hurry to help here.

  •  Holder should step aside (11+ / 0-)

    His and Breuer's financial interest in Covington disqualify him for any leadership on this issue.  Small wonder nothing has been investigated...

    Holder, Covington, and banksters

  •  Although I'm afraid this will only be a penlight (2+ / 0-)
    Recommended by:
    2laneIA, sayitaintso

    whereas we need one of them big ole strobin' lights cheesy car dealers put up, any illumination of the banksters practices is welcomed.

    Roman Catholic by birth---thoroughly confused by life.

    by alasmoses on Wed Jan 25, 2012 at 12:14:19 PM PST

  •  At first pass... (8+ / 0-)

    ...it has Election Year Gimmick written all over it.

    •  Doesn't invalidate the action. (2+ / 0-)
      Recommended by:
      Matt Z, virginislandsguy

      I time some of my actions in relation to events as well but that doesn't invalidate the gift or help.  It makes it somewhat self-serving, yes, but only somewhat if it's something I believed in anyway.  Big deal.  It still solves a problem.

      "Stupid fucker."- Erica Zwick (FB poster referring to Newt Gingrich).

      by rainmanjr on Wed Jan 25, 2012 at 01:58:14 PM PST

      [ Parent ]

      •  that's true (3+ / 0-)
        Recommended by:
        aliasalias, emal, timethief

        but I believe he/she was using shorthand for

         "this is designed to not do anything besides be a PR stunt for reelection. this is set up in such a way that it cannot succeed, and thus, the purpose of it is not what is being stated by the President."

        •  I see your belief as... (0+ / 0-)

          more of the Pres isn't doing enough for me.  I'm not saying that to be mean, just honest.  A lot of folks want blood from the bankers and no Pres is going to cut them that severely.  Our society still demands their services and money so you are hoping for something nobody will give you.  Nobody who could get elected, anyway.   GLWT.

          "Stupid fucker."- Erica Zwick (FB poster referring to Newt Gingrich).

          by rainmanjr on Wed Jan 25, 2012 at 02:23:38 PM PST

          [ Parent ]

          •  bullshit (0+ / 0-)

            you attack me personally because the president weighted this new commission in favor of the banks?

            really? that's some pretty desperate argumentation you are using there.

            •  The mere fact of your assertion... (0+ / 0-)

              that I "attacked" you is evidence of poor thinking.  I said it wasn't to be mean, just honest, and it wasn't.  It was a prelude to disagreement...which is often seen as "mean" by people who have a far Left, uncompromising, agenda.  Have a great life under Obama for the next 4 years.

              "Stupid fucker."- Erica Zwick (FB poster referring to Newt Gingrich).

              by rainmanjr on Thu Jan 26, 2012 at 01:18:15 PM PST

              [ Parent ]

  •  I'll believe it when I see some indictments - nt (11+ / 0-)
  •  Law and Ethics.... (5+ / 0-)
    We'll know how much if and when some indictments get handed down.

    ....are for poor people and suckers.  This isn't going anywhere

    Why won't Williard 'Mitt' Romney release his Tax Returns?

    by jds1978 on Wed Jan 25, 2012 at 01:07:31 PM PST

  •  problem (3+ / 0-)
    Recommended by:
    2laneIA, aliasalias, timethief

    "First of all, Schneiderman is a co-chair, along with DoJ’s Lanny Breuer, who worked for the law firm that defended MERS.

    Robert Khuzami, the director of enforcement at the SEC, who has embarrassed themselves with their no-fault settlements, is also a co-chair.

    This could be good or could amount to nothing, with Schneiderman outvoted."

  •  Question for Joan McCarter (8+ / 0-)

    A friend told me today that Obama has powers that he is not using.

    If he ordered the SEC to audit the banks, things would follow.

    If the SEC found that the big banks were underwater (and all them are), the law says that the government has to take them over and break them up.

    This would lead to major change in the system.

    Obama has hired banksters in his inner circle, so he would not use this power.

  •  co-opting Schneiderman? (5+ / 0-)

    What does he get out of this?  It's not like he doesn't have the facts, the power, the resources to prosecute right now. So given that this doesn't make that job any easier, what's up with him doing this?

    The makeup of the committee is not cause for optimism, either--people who have wondered aloud what the big deal was with the mortgage mess.  

    And it sounds a lot like earlier "investigative" efforts, who took desultory looks at the problem and concluded "this mess was really no one's fault."

    I'd rather see a special prosecutor, independent, with free rein and a large budget, on the order of Patrick Fitzgerald on Scooter Libby.  

    Can we at least put the proposed toothless settlement pact on the shelf while this committee does its work?  

    •  and see the linked Mike Lux diary..coopted? (2+ / 0-)
      Recommended by:
      Wolf10, kay dub

      could be, for an AG to advance to the national level where he could do Greater Good, it would be career suicide to say no, or to be quick to not go along to get along...and that's how They get ya.

      This will be grimly interesting.

      Real integrity and doing Good would be to resign as soon as he can demonstrate how coopted and proscribed this may be..and we all certainly hope it isn't.
        And any AG who wants to do Good would also be tempted to think he was The Guy who could change it.

      Like Joan says, we will see.

      ..squinting all the while in the glare of a culture that radiates ultraviolet consumerism and infrared celebrity...Russell Brand

      by KenBee on Wed Jan 25, 2012 at 01:54:54 PM PST

      [ Parent ]

  •  Beau Biden for prez 2016 (1+ / 0-)
    Recommended by:
    rainmanjr

    "Show up. Pay attention. Tell the truth. And don't be attached to the results." -- Angeles Arrien

    by Sybil Liberty on Wed Jan 25, 2012 at 01:22:52 PM PST

  •  Good. (1+ / 0-)
    Recommended by:
    virginislandsguy

    Best news in a long time.

  •  The committeee is another piece of window dressing (11+ / 0-)

    Any action will be defeated with a 4:1 or 3:2 vote as none of these guys have done shit and in fact profit now or later enormously when the Bankers walk.

    Lanny Breuer, assistant attorney general (Partner and white collar defense attorney for Covington and Burlington

    Robert Khuzami,

    In 2004, Khuzami was hired by Richard H. Walker to work at Deutsche Bank in New York, where he supervised more than 100 lawyers[12] and oversaw Americas-based litigation and regulatory enforcement. From 2002 to 2004, he headed their global litigation and regulatory investigations. He stayed at the bank until 2009. Walker, who had met Khuzami at Cadwalader, Wickersham & Taft when Walker was a partner there, later recommended him for the enforcement job at the SEC,[1] a job he had once held himself as director of enforcement at the SEC;

    John Walsh, a U.S. attorney in Colorado on a crusade to stop all medical marijuana use, Oh boy.

     Tony West, assistant attorney general in the Civil Division at DOJ.

    Since January 2009, the Civil Division, working with our partners in U.S. Attorney’s Offices around the country, secured over $10 billion in fraud settlements, judgments, fines and penalties under the Division’s statutory authorities.

    In addition, Mr. West has emphasized the Civil Division’s responsibility to enforce the nation’s consumer protection laws. Since January 2009, the Office of Consumer Protection Litigation has convicted more than 90 defendants with imposed criminal penalties exceeding $3.3 billion for illegal activities in connection with defrauding consumers. During this same time period, over 55 defendants were sentenced to some form of incarceration, receiving a total of more than 224 years.


    (My emphasis as the number of defendants should have 2 more zeroes and the settlements should be upwards of 3 trillion with clawbacks)
    There maybe one yes vote in there on something that doesn't mean much. All in all, it's bullshit.
  •  I'm cautiously celebrating (1+ / 0-)
    Recommended by:
    rainmanjr

    To me, holding the banks accountable is extremely important, so to hear this was a GIANT reason to think about supporting Obama for a second term. I want to see more, MUCH more, but today, I can finally begin to think about being on board with Obama 2012. This, and the solution to Citizens United, goes to the very heart of our problems in America, and what kind of future we'll all have if they're addressed and resolved! It's a start. Thank you President Obama!

  •  "These are not the droids you are looking for" n/t (2+ / 0-)
    Recommended by:
    bluicebank, jeopardydd

    Listen, strange women lyin' in ponds distributin' swords is no basis for a system of government. Supreme executive power derives from a mandate from the masses, not from some farcical aquatic ceremony.

    by EdMass on Wed Jan 25, 2012 at 01:26:01 PM PST

  •  Oh please, failure to announce a "crappy (3+ / 0-)
    Recommended by:
    genethefiend, jeopardydd, 2laneIA

    settlement" is not due to any virtuous or progressive impulses among White House financial cadre; it's because of broad-based opposition to it by homeowner and investor advocates, not to mention advocates of the rule of law. It  is very likely that key elements of the proposed settlement conflict with existing criminal and property law, including serious constitutional issues.

    The frog jumped/ into the old pond/ plop! (Basho)

    by Wolf10 on Wed Jan 25, 2012 at 01:37:20 PM PST

  •  My bank just offered me a refinance (2+ / 0-)
    Recommended by:
    Wolf10, 2laneIA

    With no closing costs (yet it is going to require $1800).  I asked them how they are going to make money (before I found out about the $1800) and they claimed it was an effort to retain customers.
    I am really leery of this, but we are underwater and cannot refinance with anyone else.  So we are going to pass and hope that somewhere along the line those mortgage writedowns we hear so much about will happen.
    But I wonder if the banks know something is going to happen?  Why are they offering this?

  •  I thought the whole problem is that there (3+ / 0-)
    Recommended by:
    maryabein, 2laneIA, aliasalias

    Weren't enough laws.  So what possible good does it do to have the authority to:  

    Hold accountable any institutions that violated the law

    I would like to see a concise brochure laying out the regulations that used to be in place, when each was eliminated, and drawing a direct connection from deregulation to the resulting mortgage crisis.  And showing which consumer protections are now put back in?  Preferably all in colorful graphics, so that even a Republican can understand.  Has anyone seen such a thing?

    My first job out of college was as an internal auditor for a Savings & Loan bank.  I remember auditing EVERY mortgage  file to verify the loan officer had verified income and loaned only up to the bank's authorized loan to income ratio.  It was serious business with serious consequences for the loan officers who were overly generous to lenders.  Somewhere along the line, we lost that and people need to understand that regulations are important for their protection.  And to Hell with how they might make it harder for the damn banks to squeeze more profit-blood out of their turnips.

    Can't never did nothin'; Can Do did!

    by susanWAstate on Wed Jan 25, 2012 at 01:43:35 PM PST

  •  The subprime/mortgage securitization/foreclosure (8+ / 0-)

    crisis and the response to it in terms of real aid to homeowners and investigation and prosecution of the corporate perps can be used to illustrate future entries in a dictionary for "slow walking".

    Because that's what this has been - one giant slow walking exercise,  hoping that the public outrage and disgust will burn itself out and statutes of limitations will expire.  Paltry fines that are a fraction of the swag taken, "the cost of doing business",  will be paid grudgingly and the perps can get happily back to work devising new unethical and immoral and illegal if anyone would prosecute them schemes to separate the American public from their homes and dollars.

    History will be very unkind looking back at this chapter of financial and governmental cronyism. I am unkind looking at it right now.

    “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

    by Phoebe Loosinhouse on Wed Jan 25, 2012 at 01:46:59 PM PST

  •  DoJ (4+ / 0-)
    Recommended by:
    jeopardydd, Wolf10, maryabein, 2laneIA

    can do anything within the law to uphold the law therefore a new organization cannot have more powers than the DoJ without changing the law.

    In other words, the DoJ needs to do its job and we don't need any more distractions like this one.

  •  I'm not confident that this will lead to anything (1+ / 0-)
    Recommended by:
    jeopardydd

    significant.  It's 3 years late and Obama blamed both sides for the crash in the SOTU, irresponsible borrowers and unethical lenders.

    We also need to keep pressure on the CFPB and the Dodd-Frank financial rules, MOST of which have yet to be enacted.

  •  "To create disarray among the dissenting AGs" (4+ / 0-)

    a possible motive according to Yves Smith:

    It would appear big aim of setting up this committee (and the uncertainty as to whether Schneiderman is now going to join the settlement deal) is to create disarray among the dissenting AGs. I’m sure it is no coincidence that there is a conference call scheduled for 11:00 AM tomorrow among the Democratic AGs. Delaware’s Biden as of Tuesday afternoon said he was not supporting a settlement, and there is good reason to think at least Masto of Nevada, who has been the most aggressive so far, will hold firm.

    It would be better if I were proven wrong, but this looks to be yet another clever Obama gambit to neutralize his opposition. With all the same key actors in place – Geithner, Walsh, Holder – there is no reason to believe the Administration has had a change of heart until there is compelling evidence otherwise.

    Is Schneiderman Selling Out? Joins Federal Committee That Looks Designed to Undermine AGs Against Mortgage Settlement Deal

    The frog jumped/ into the old pond/ plop! (Basho)

    by Wolf10 on Wed Jan 25, 2012 at 02:15:06 PM PST

  •  What we need are the Untouchables. (0+ / 0-)

    We need a group of smart money hounds to trace who got what during the crisis and start busting down doors of banks to confiscate their records before they lose them.

    It's a hide and seek game for them. And we can't tie the hands of those searching for answers.

    "I think it's the duty of the comedian to find out where the line is drawn and cross it deliberately." -- George Carlin, Satirical Comic,(1937-2008)

    by Wynter on Wed Jan 25, 2012 at 02:44:08 PM PST

  •  Call me cynical (0+ / 0-)

    but if my mortgage were far underwater, I wouldn't wait for action from Washington.  I'd look into bankruptcy and a strategic default NOW before the practice became widespread and bankruptcy laws were changed by the 1% who really run things to make it impossible.  Don't think it can't happen.  Student loans are not forgiven in bankruptcy.

  •  Call me cynical too! (0+ / 0-)

    All this committee will do is postpone the settlement that the Obama administration has been pushing for a long time.  If this committee was legit, are we expected to be naive enough to believe that in the last 3 years there have been no documents shredded, no hard drives purged, no books cooked?  I think not.  The bs will continue until after the election, then the settlement that really screws those who lost their homes, will be implemented, and no one will go to jail.

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