Attorney General of N.Y. Is Said to Face Pressure on Bank Foreclosure Deal

[Donnachaidh]

http://www.nytimes.com/2011/08/22/business/schneiderman-is-said-to-face-pressure-to-back-bank-deal.html

Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.

In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.

Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.

But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general’s participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation.

More at the link --

Still more of that *Change You Can Believe In*? This administration has NO problems fighting for bankster's rights....

:puke:

[ProSense]

1. From the OP:

<...>

In an interview on Friday, Mr. Donovan defended his discussions with the attorney general, saying they were motivated by a desire to speed up help for troubled homeowners. But he said he had not spoken to bank officials or their representatives about trying to persuade Mr. Schneiderman to get on board with the deal.

“Eric and I agree on a tremendous amount here,” Mr. Donovan said. “The disagreement is around whether we should wait to settle and resolve the issues around the servicing practices for him — and potentially other A.G.’s and other federal agencies — to complete investigations on the securitization side. He might argue that he has more leverage that way, but our view is we have the immediate opportunity to help a huge number of borrowers to stay in their homes, to help their neighborhoods and the housing market.”

And Alisa Finelli, a spokeswoman for the Justice Department. said: “The Justice Department, along with our federal agency partners and state attorneys general, are committed to achieving a resolution that will hold servicers accountable for the harm they have done consumers and bring billions of dollars of relief to struggling homeowners — and bring relief swiftly because homeowners continue to suffer more each day that these issues are not resolved.”

<...>

That is sort of in conflict with the rumor factor of the article. Still, it's clear that if the AGs don't agree, there will be no deal.

Foreclosure Talks Snag on Bank Liability

<...>

U.S. and state officials dismissed the push for broad immunity as a "nonstarter," according to a federal official involved in the talks, but they have countered with a narrower offer. It would cover robo-signing and other servicer-related conduct but leave banks open to potential legal action for wrongdoing in fair lending and securitization, according to people familiar with the situation. Attorneys general in California, Delaware, Massachusetts and New York have said they are investigating mortgage-securitization practices.

<...>

Nevada Attorney General Catherine Cortez Masto said she is "going to be very cautious" about any release that could affect investigations or litigation. Ms. Masto has alleged that Bank of America violated the law in its handling of troubled loans. "A broad release isn't going to do … any good (for me) or the people of my state."

Massachusetts Attorney General Martha Coakley recently said she won't let banks escape potential legal liability for claims related to securitization and use of the Mortgage Electronic Registration Systems "until we know all the facts and all of the damage." Doing otherwise "is like buying a used car without looking under the hood. There's a good chance you will get a lemon."

<...>

Delaware Attorney General Beau Biden has also begun investigating securitization and other mortgage-industry practices. "We would oppose any settlement that would release claims broader than servicing conduct," says Delaware Deputy Attorney General Ian McConnel."That would include origination, securitization and (Mortgage Electronic Registration Systems) claims."

[OHdem10]

2. Yes and the Republicans expect us to REWRD these Job Creators

with Tax cuts.

[amborin]

3. more here from Naked Capitalism: homeowners lose big time

Corrupt Obama Administration Pressuring New York Attorney General to Support Mortgage Whitewash

It is high time to describe the Obama Administration by its proper name: corrupt.

Admittedly, corruption among our elites generally and in Washington in particular has become so widespread and blatant as to fall into the “dog bites man” category. But the nauseating gap between the Administration’s propaganda and the many and varied ways it sells out average Americans on behalf of its favored backers, in this case the too big to fail banks, has become so noisome that it has become impossible to ignore the fetid smell.

The Administration has now taken to pressuring parties that are not part of the machinery reporting to the President to fall in and do his bidding. We’ve gotten so used to the US attorney general being conveniently missing in action that we have forgotten that regulators and the AG are supposed to be independent. As one correspondent noted by e-mail, “When officials allegiances are to El Supremo rather than the Constitution, you walk the path to fascism.”

Revealingly, one of the Administration’s allies said: “Wall Street is our Main Street.” And the worst is that this remark may not be a cynical Ministry of Truth pronouncement. Team Obama bears all the hallmarks of being so close to banks and big corporations that it has lost all contact with and understanding of mainstream America.

snip

http://www.nakedcapitalism.com/2011/08/corrupt-obama-administration-pressuring-new-york-attorney-general-to-support-mortgage-whitewash.html

[amborin]

4. just an incredible sham...Wall St wins once again

[amborin]

5. Donovan's assertion does not pass the credibility test"

"....Marcy Wheeler, who has more patience for this vomititious tripe than I do, explains why Donovan’s assertion does not pass the credibility test:

"You see, the Administration has an “immediate opportunity to help a huge number of borrowers stay in their homes,” without any action from Eric Schneiderman. They have a way to do so more swiftly, in such a way the servicers actually would be held accountable It would involve offering refis with principal reductions to all the underwater homeowners whose loans are owned by Fannie and Freddie. That would not only help a huge number of borrowers stay in their home, but it would be massive stimulus.

But instead they’re sending Donovan to pressure Schneiderman to pursue a measure that would benefit far fewer homeowners and probably take more time, while putting the last nail in the coffin of the rule of law in this country""

http://www.nakedcapitalism.com/2011/08/corrupt-obama-administration-pressuring-new-york-attorney-general-to-support-mortgage-whitewash.html