TheStreet.com recently reported that the Obama administration is pushing hard for a broad foreclosure fraud settlement between the federal government, all fifty states, and the nation’s five largest banks.
According to FBR’s Washington contacts, “the Obama Administration, especially Housing and Urban Development Secretary Shaun Donovan, has stepped up efforts to come to a settlement,” along with the U.S. Justice Department, ” on behalf of claims related to FHA loans.” Attorneys General Tom Miller (D-Iowa) and Lisa Madigan (D-Ill.) continue to lead the negotiations, with New York Attorney General Eric Schneiderman continuing to oppose a multistate settlement.
According to the report, the major remaining hurdles to the settlement — which will include penalties for improper foreclosure filings, as well as large outlays for principal reductions to facilitate mortgage loan refinancing — are “to convince California Attorney General Kamala Harris that the deal is large enough and provides enough political cover to sign onto,” and “to convince the servicers, especially Bank of America, that the liability release is worth the penalty it will be paying.”
The Obama administration is putting pressure on California’s Harris, so the nation’s largest state would add the patina of this being an actual national deal. Everything that’s been reported about this deal says it’s a horrible deal for homeowners and a disgrace to the rule of law.
As a result, it’s not shocking that a movement that is going directly after Wall Street lawlessness and the power of financial elites would specifically target the Obama administration around the pending retroactive immunity for bank fraud connected to the financial and foreclosure crises. Occupy Wall Street is marching today around the foreclosure deal, calling on President Obama to be Wall Street’s puppet:
“This is a clear, moral issue that cuts to the core of why we occupy,” said Max Berger, an Occupy Wall Street participant helping to plan the event. “Instead of throwing corrupt bankers in jail, the administration is pushing to give them a get-out-of jail-free card.”
“President Obama and the attorneys general have a choice: do they stand with Wall Street, or do they stand with the 99%?” he said.
“We will not stand for a system that gives campaign contributors a right to immunity, while serving foreclosure papers to the 99%,” said Beth Bogart, a volunteer with Occupy Wall Street. “We will not stand for a country where bankers that issued deadly mortgage-backed securities are bailed out, but homeowners with mortgages are illegally thrown out on the street.”
This is an important and savvy foray by Occupy Wall Street into a very specific policy issue. But the foreclosure crisis is core to the problems of our economy and any efforts by the Obama administration to bail out the banks at the expense of homeowners should be opposed by the Occupy movement.