One thing I’ve observed about Eric Schneiderman since he became the New York Attorney General is that he goes about his work. He doesn’t show up in the media, he doesn’t write op-eds for the New York Times. He makes his arguments in court, as befitting the state’s top prosecutor. The New York AG position has been a high-profile one for a long time, from Andrew Cuomo to Eliot Spitzer and even before that. But Schneiderman is more concerned with his mission than with press clippings.
So when he was pressured by the White House and then booted off the executive committee “investigating” foreclosure fraud, I didn’t really expect him to run to the media. Instead, he let his constituents know he was planning to keep working for them.
In an email to campaign supporters today, which came with the subject line “Standing Up For You,” he wrote:
“You might have been following the latest developments related to the national settlement of the mortgage probe, including this story in today’s Huffington Post about our tough fight for a comprehensive resolution to this crisis.
“Let me tell you directly: I am deeply committed to pursuing a full investigation into the misconduct that led to the collapse of America’s housing market, and to seeking a resolution that gives homeowners meaningful relief, allows the housing market to begin to recover, and gets our economy moving again.
“Our ongoing investigation into the housing crisis cannot be shut down to accommodate efforts to settle quickly and give banks and others broad immunity from further legal action. If you have any thoughts or concerns about this critical issue, please contact me at 1-800-771-7755, or send a message via Facebook or Twitter.”
Pretty simple and humble. And inclusive, allowing for public comment. I’m sure Kathryn Wylde will be the first to call.
Meanwhile, Americans for Financial Reform, the coalition that worked on the Dodd-Frank Act, put together a letter to the executive committee of AGs working on the foreclosure fraud settlement with the banks, along with HUD Secretary Shaun Donovan and Thomas Perrelli, the lead at the Justice Department on the issue. In the letter, signed by over 35 progressive organizations, faith groups, unions and housing advocacy groups, they urge that any settlement “leaves open the path for further needed actions to hold lawbreakers accountable.”
Abuse, fraud, conflicts of interest, and lawlessness have been endemic at every stage of the mortgage origination, pooling, securitization, and servicing and foreclosure process. This chain of misconduct by many of the nations’ largest financial companies is at the root of the foreclosure avalanche, of the failure of existing programs to resolve the problem, and a fundamental cause of the broader economic crisis that has cost millions of jobs and is compounding the foreclosure problem now. In turn, failure to resolve the foreclosure crisis is worsening our economic situation, and making it harder to create jobs.
As settlement discussions between the Attorneys General, the federal agencies, and the mortgage servicers continue, we want to reiterate our view that pressure for an immediate settlement must not outweigh the more important need for a settlement appropriate to the vast scale of the laws broken and the harm done. We understand that industry is pressing to limit relief and for overly broad releases; they must not be allowed to succeed. To the extent that institutions or individuals committed illegal acts, there have to be consequences for breaking the law that are in proportion to the seriousness of the violations.
The kind of settlement they’re talking about is the kind I might support: one narrowly tailored on robo-signing, with mandatory principal reductions, restitution for borrowers who were wrongly foreclosed upon, an overhaul of the servicing process, and without the liability release extending to “securities claims, fair housing claims, chain of title claims or claims regarding servicers’ use of MERS.” But of course, this is precisely the kind of settlement the banks would never accept.
So in the absence of that, we need a full investigation of the criminal lawbreaking by the banks, and a process that holds them accountable for it. And that doesn’t just include a payoff. That appears to be the commitment Schneiderman is making, and I applaud it.