Foreclosuregate Update: Another AG takes a stand against immunity from liability for the banksters of Wall Street

Posted by AzBlueMeanie:

Matt Browner Hamlin posts at Americablog.com More AGs drawing lines in the sand on bank settlement talks:

Minnesota Attorney General Lori Swanson has written a very powerful letter to Iowa AG Tom Miller, NY AG Eric Schneiderman and an associate AG at the Department of Justice stating where she stands on the fifty forty-five state robosigning settlement talks with the nation's five largest banks. In it, she calls for a settlement with "teeth." She goes on:

[T]he banks should not be released from liability for conduct that has not been investigated and is not appropriately remedied in any settlement. For example, a settlement that focuses on mortgage servicing standards should not release the banks or their officers from liability for securities claims or conduct arising out of the securitization of mortgages or liability arising out of the use of the Mortgage Electronic Registry System ("MERS"), where those claims have not been investigated or fairly addressed through the settlement. In addition, I am sure we all agree that the banks and their officers cannot and should not be released from criminal liability in any civil settlement

This is strong stuff. Swanson also supports the FHFA lawsuit against the banks and calls on her colleagues not to do anything to impede it. She writes, "We should fully welcome and support all legitimate efforts to investigate the banks and to hold them accountable for their unlawful activity, which has been enormously destructive to this country and our citizens."

Swanson joins Schneiderman, Catherine Cortez Masto of Colorado, Beau Biden of Delaware, and Martha Coakley of Massachusetts as AGs who have stood up for strong settlement demands and their right to investigate.

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There's clear momentum in the direction of holding banks accountable. As more attorneys general come out against a broad settlement on foreclosure and securitization fraud, the less likely any settlement becomes. Kudos to AGs Swanson and Biden for standing up to the banks and for their constituents.

Is Arizona AG Tom Horne among those who want to compromise with the banksters of Wall Street for a mere fraction of a penny on the dollar and to grant them immunity from any legal liability so they can go on stealing from the American people with impugnity?

Whose side is Tom Horne on? Curious how the Arizona political media never ask him what his position is in the fifty forty-five state robo-signing settlement talks.

UPDATE: Katrina vanden Heuvel writes at the Washington Post A gutsy fighter for mortgage relief:

This Thursday will mark three years since the collapse of Lehman Brothers, a defining moment of the financial crisis. Today, it’s clear that very few lessons have been learned from it by our political leaders or those on Wall Street; if any, the wrong lessons have been learned. But one conclusion, seared into the minds of ordinary Americans, is as clear as it is wrenching: The banks play by one set of rules and are held to one standard, while the rest of us are held to another.

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After signing off on shoddy loans, putting Americans in homes they couldn’t afford, on terms they could barely understand, the banks began foreclosing on homeowners en masse, using what’s known as robo-signing. That procedure allows banks to process foreclosures faster by encouraging employees to use fake signatures to approve documents they don’t read.

An investigation was launched, exposing once again that the banks play by a different set of rules. And so in negotiations ongoing between banks and state attorneys general on mortgage relief, the agreement on the table is nothing short of a sweetheart deal.

The banks are being asked to pay just $20 billion dollars to homeowners and investors, a pathetically meager sum that represents only a fraction of the damage they caused. In exchange, the banks will receive immunity from any further investigation into what happened behind their closed doors in the run-up to — and aftermath of — the financial crisis they are responsible for.

The group of 50 state attorneys general charged with negotiating on behalf of people who lost their homes – the very officials who should be working to discover the full extent of the crimes and fraud perpetrated by the banks – are being asked, essentially, to give up and go away.

Instead of being met with outrage, with outright indignation over the notion that egregious acts will be swept under the rug, the settlement has been met with enthusiasm from the vast majority of state attorneys general. In instances they have been actively pushed by the Obama administration, which fears that state-by-state litigation will injure the banks. Only a relative few have stood firmly against the bank’s demands: chief among them, New York Attorney General Eric Schneiderman.

Schneiderman called the settlement “quick” and “cheap” and refused to sign off on it. Agreeing to it would deprive attorneys general of the opportunity to further investigate bank actions, something he could not stomach. “The key is that you don’t settle claims you haven’t investigated,” Schneiderman told me in a phone interview. The attorneys general overseeing the settlement still haven’t deposed a single witness, have not been provided with a single document and have not done anything that remotely resembles a real investigation. In return for his refusal to give in, Schneiderman was booted off the steering committee in charge of the negotiation.

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With attorneys general unwilling to do a serious investigation that would show how pervasive mortgage malpractice was — and how gravely the public has been damaged— how could the resulting deal possibly be fair? The kind of genuine investigation Schneiderman is fighting to undertake, on the other hand, could result in a full accounting of what really happened, and it could mean a different level of accountability for banks (perhaps there could even be criminal charges).

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Though an effort has been made by some to cast Schneiderman as a loner in the mortgage-settlement fight, events in recent weeks show him as anything but. On Aug. 25, after Schneiderman was removed from the negotiations, 21 of New York’s congressional representatives sent a letter of protest to Iowa Attorney General Tom Miller, who was responsible for Schneiderman’s ouster. On Sept. 8, the New York City Council passed a resolution supporting Schneiderman’s stand and asking the larger committee of state attorneys general not to give up the right to pursue further investigations. Even former New York senator Al D’Amato, a conservative Republican, has offered broad praise for Schneiderman’s effort.

Schneiderman has also found strong support from two other important state attorneys general, Delaware’s Beau Biden and Massachusetts’s Martha Coakley.

Some now predict the negotiations will collapse, with banks unwilling to give back even what chump change is now on the table. Only an investigation like the one Schneiderman has been pushing for could provide the leverage needed to force banks to make an offer commensurate with the scale of the harm they caused.

At a time when so many of our political leaders seem more in touch with the needs of K
Street, detached from the people they represent, it is heartening to see a gutsy leader like Schneiderman willing to stand with people against the forces that blew up our economy.