White House To Create Mortgage Crisis Unit To Probe Bankster Wrongdoing; Names Foe Of Current State AG Investigation To Co-Chair Operation

Bloomberg reports:

• President Barack Obama said he will create a mortgage crisis unit that includes federal and state officials to investigate wrongdoing by banks related to real estate lending.



• The president announced the unit in his State of the Union speech yesterday after protests by the Campaign for a Fair Settlement, a coalition of labor unions, consumer advocates and political activists including MoveOn.org. The group is calling for a full investigation into bank home lending and the creation and sale of mortgage-backed securities.



• “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,” Obama said in the speech.



• New York Attorney General Eric Schneiderman will co-chair the unit along with officials from the Department of Justice, Securities and Exchange Commission and Internal Revenue Service.

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• Representatives of Democratic attorney general offices met at a Chicago hotel Jan. 23 to discuss the negotiated terms and ask questions, said Iowa Attorney General Tom Miller. Miller, who is helping to lead talks, said an agreement with the banks is getting closer.



• Schneiderman and California Attorney General Kamala Harris have said any settlement shouldn’t protect banks from claims that haven’t been fully investigated, such as claims stemming from the packaging of mortgages into securities sold to investors.

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• Schneiderman has been participating in the nationwide probe of foreclosure practices. His office also has been conducting a broader investigation into the mortgage operations of major banks.



• “In coordination with our federal partners, our office will continue its steadfast commitment to holding those responsible for the economic crisis accountable, providing meaningful relief for homeowners commensurate with the scale of the misconduct, and getting our economy moving again,” Schneiderman said in his statement.

For the story, see Obama Creates Unit With States to Investigate Mortgage Misconduct by Banks.

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

• I’ll pepper in my thoughts on the State of the Union Address throughout the day, but I would be remiss if I didn’t start with the announcement of a Unit on Mortgage Origination and Securitization Abuses (UMOSA) to investigate bank practices during the financial crisis.
  
  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.