Tom Miller’s feewings are huwt. He doesn’t like how he’s being portrayed by those who have actually taken a look at how he’s been handling the 50-state “investigation” on foreclosure fraud. And he’s having his top deputy defend him to major media.
Those involved in the settlement talks are increasingly frustrated at how their efforts have been perceived.
“We’ve been accused of being in bed with the banks. To say that to a group of people who have spent the last seven to 10 years fighting mortgage abuses day in and day out is an insult of the highest order,” said Iowa Assistant Attorney General Patrick Madigan, a longtime Miller deputy, who has worked on major settlements with subprime lenders such as Countrywide and Ameriquest. “It’s just unreal.”
Oh really? The Countrywide settlement? You’re touting the Countrywide settlement? Can I have your fax number, Attorney General Miller? There’s something I want to send you from Attorney General Masto that I’d like you to see.
Incidentally, this is par for the course for Miller. He’s been hyping the Countrywide settlement since he signed onto it in October 2008. Pity he hasn’t been checking to see if Bank of America abided by the terms of it in any way whatsoever. Marcy Wheeler shot the fish in the barrel on this one, too.
The novel new criticism of Eric Schneiderman’s demands for investigations is that homeowners would get lost in the shuffle:
If Schneiderman were to get his way, his critics warn, homeowners could end up at the same table as massive asset and investment management firms such as Pimco and BlackRock. The interests of ordinary homeowners could end up competing with those of financial heavyweights. Even more thorny legal issues, such as those related to the way pools of mortgages were bundled and sold to investors, would be injected into the discussions.
Critics say such an approach would delay a final settlement, with no guarantee of helping homeowners at the end of the day.
There’s a kernel of truth to this. But are these anonymous critics aware that Schneiderman, by intervening in the Bank of America MBS settlement, is taking on Black Rock and Pimco, who are parties to that settlement? All this bickering about an investigation stands in for the investigation; the defenders of the settlement have literally been going in circles for almost a year. In that time, Schneiderman has actually moved forward on investigating securitization and produced results. As his spokesman Danny Kanner said, a global settlement by Miller and others “would unequivocally preclude Attorney General Schneiderman and other state prosecutors from following the facts where they lead.”
I think the White House has pretty much given up on the settlement at this point. Their internal deadline was Labor Day, and it looks like they’ll announce something then, just not the settlement. More likely they will announce some new steps aimed at mortgage relief through refinancing, which still has to surmount the hurdle that is Ed DeMarco of the FHFA, who has resisted efforts of this type at Fannie and Freddie. Interesting side note in that story that Tim Geithner tried to fire DeMarco but abandoned the idea after finding himself unable to find a credible replacement. The refinancing effort is more a Congress-free stimulus measure, with a benefit of anywhere between $20-$80 billion a year depending on who you ask, than a real fix for the housing market, of course.
But back to my main point. A settlement will not be part of this announcement, because some important Attorneys General think it’s more important to defend the rule of law than to let banks off the hook for systematic crimes that they will probably continue to commit even in the event of a settlement. Even those AGs in the settlement talks agree that there will be no broad release of claims, and that the investigations of Schneiderman and the other states on issues beyond robo-signing and servicing should continue. Of course, this guarantees that there will not be a settlement, because the banks want a liability release on everything.