(2 pm. – promoted by ek hornbeck)
85 days and counting since President Obama announced in his State of the Union speech the formation of the Residential Mortgage Backed Securities Working Group (RMBS) co-chaired by NY State Attorney General Eric Schneiderman and it is still a toothless entity that has so office space, phones and has yet to be staffed. The New york Daily News noticed, suggesting that Schneiderman should quit this fraud:
[..]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.”
The promises of the President have led to little or no concrete action.
In fact, the new Residential Mortgage Backed Securities Working Group was the sixth such entity formed since the start of the financial crisis in 2009. The grand total of staff working for all of the previous five groups was one, according to a surprised Schneiderman. In Washington, where staffs grow like cherry blossoms, this is a remarkable occurrence.
We are led to conclude that Donovan was right. The settlement and working group – taken together – were a coup: a public relations coup for the White House and the banks. The media hailed the resolution for a few days and then turned their attention to other topics and controversies.
But for 12 million American homeowners, collectively $700 billion under water, this was just another in a long series of sham transactions.
Schneiderman, who has acted boldly and honorably, should distance himself from this cynical arrangement. He should resign and go back to working effectively with fellow attorneys general in Delaware, Massachusetts and Nevada.
They are much more likely to create the kind of culture of accountability in the financial community that will protect U.S. families from the next real estate scam.
According to a Reuter’s report, the office space has been located:
The task force includes the Justice Department, the SEC, the FBI and the Department of Housing and Urban Development, among others. It is charged with investigating the pooling and sale of home loans that contributed to the financial crisis.
While the group faced some skepticism, considering the crisis began nearly five years ago, there are signs it is serious about bringing cases.
The co-chairs meet formally every week and talk almost every day to coordinate on “a range of investigations,” a Justice Department official said, on condition of anonymity.
About 50 staff members are working on the effort, and the task force has identified separate office space in Washington and will move some personnel there, the official said.
The Justice Department last month posted a one-year position of full-time coordinator for the working group who could help manage discovery and coordinate investigations, according to the job posting.
Yves Smith at naked capitalism agrees that Schneiderman has been had by the Obama administration:
It was pretty obvious Schneiderman had been had. Obama tellingly did not mention his name in the SOTU. Schneiderman was only a co-chairman of the effort and would still stay on in his day job as state AG, begging the question of how much time he would be able to spend on the task force. His co-chairman is Lanny Breuer from the missing-in-action Department of Justice. And most important, no one on the committee was head of an agency, again demonstrating that this wasn’t a top Administration priority.
However, she disagrees with the Daily News assessment of Schniederman acting “boldly and honorably” and that he can go back to working with the other attorneys general:
Schneiderman’s actions were neither bold nor honorable. Not surprisingly, his effort at a star turn in the national media has not led to favorable poll results for him in New York. And the Daily News offers a fantasy as an alternative. There is no “going back.” The attorneys general gave up their best legal theories, and with it, their ability to protect the integrity of title, for grossly inadequate compensation and a photo opportunity.
It would be better if we were proven wrong, but Schneiderman entered into an obvious Faustian pact. He’s not getting his soul or his reputation back.
Meanwhile as reported by Think Progress,
A recent report showed that mortgage foreclosure scams have spiked 60 percent in 2012, while the nation’s biggest banks continue to sit upon a slew of fraudulent mortgage documents. A recent investigation of foreclosures in San Francisco found that nearly all of them had legal problems or suspicious documents, prompting the city council to suggest a foreclosure moratorium.