In the article below by Mike Gecan and Arnie Graf of the New York
Daily News, they question what happened to Obama’s pledge to bring mortgage
fraud to light and relief for homeowners. Romney has already suggested
that the way to get through this crisis is to escalate foreclosures.
BY MIKE GECAN AND ARNIE GRAF / NEW YORK DAILY NEWS
Three months ago, in his State of the Union speech, President Obama
announced a new task force to investigate mortgage fraud and bring
some measure of relief to the 12 million American families who are
either losing their homes or in danger of losing them.
The new Residential Mortgage-Backed Securities Working Group would be
co-chaired by New York State Attorney General Eric Schneiderman, U.S.
Attorney John Walsh of Colorado and three Washington insiders from the
Justice Department and the Securities and Exchange Commission.
Obama said, “This new unit will hold accountable those who broke the
law, speed assistance to homeowners and help turn the page on an era
of recklessness that hurt so many Americans.”
Whether or not the President, attorney general and others intend to
get around to this task someday, “speed” was a terrible word to
choose. Because 85 days after that speech, there is no sign of any
The new working group was so prominently featured because of
relentless pressure that Schneiderman and others — including the Metro
Industrial Areas Foundation we lead — had exerted in the weeks leading
up to the speech. Our position was that a $25 billion settlement with
the big banks being pushed by the administration was just 10% of what
was needed to repair the damage done to homeowners and communities by
predatory banking practices.
Just a day before the State of the Union, an attempt by the
administration to rally most of the nation’s other attorneys general
to support the feds’ settlement with the banks had fallen flat.
Schneiderman and his allies pledged to hold out until the
administration agreed the settlement would not release the banks from
The ballyhooed working group was supposed to be the vehicle for
continued scrutiny and pressure on the banks. To leave no doubt about
the symbolism, Schneiderman was in the State of the Union gallery,
seated right behind the First Lady.
But very, very little has happened since.
Yes, for a few days, there seemed to be a renewed sense of purpose and
focus from the administration. U.S. Attorney General Eric Holder held
his own news conference and announced that at least 55 Justice
Department lawyers, agents, analysts and investigators would be
assigned to the effort. A news release promised 30 staffers would be
joining efforts “in the coming weeks.”
Housing and Urban Development Secretary Shaun Donovan appeared on a
morning talk show and described the administration’s actions as “a
Schneiderman, who had expended so much energy and political capital
leading up to the State of the Union, appeared on MSNBC and said the
settlement was just an opening phase and that “everything was still on
the table.” On Feb. 9, what Schneiderman described as this first
“narrow settlement” was unveiled by all parties.
On March 9 — 45 days after the speech and 30 days after the
announcement — we met with Schneiderman in New York City and asked him
for an update. He had just returned from Washington, where he had been
personally looking for office space. As of that date, he had no
office, no phones, no staff and no executive director. None of the 55
staff members promised by Holder had materialized. On April 2, we
bumped into Schneiderman on a train leaving Washington for New York
and learned that the situation was the same.
Tuesday, calls to the Justice Department’s switchboard requesting to
be connected with the working group produced the answer, “I really
don’t know where to send you.” After being transferred to the attorney
general’s office and asking for a phone number for the working group,
the answer was, “I’m not aware of one.”