Saturday, August 27, 2011

Stop the Wall Street settlement, with immunity from prosecution for mortgage fraud

In a very discouraging bit of news, it was announced today that 45.6 billion of the TARP funds that were suppose to help struggling homeowners avoid foreclosure only 2 billion had been spent.  Instead of renewing efforts to help homeowners, they are going to use the balance of the funds to pay down the national debt. In the first half of this year one million foreclosure were filed.  Wall Street makes money on every foreclosed home, average citizens lose almost everything in a foreclosure.  The government has done almost nothing to help homeowners avoid foreclosure and stay in their homes.  The government provided trillions to save Wall Street banks but they can't even spend 45 billion to save the average American's home.  The republicans successfully fought a provision that would have allowed bankruptcy judges to adjust mortgage payments for homes nearing foreclosure.  But if you have a vacation home or a second or third home, bankruptcy judges can help you out.  It's just the average citizen that the courts are legally bound to NOT help.   If your tired of Wall Street getting away with "financial murder", sign this petition from CREDO.
From Credo:
The notorious robo-signing scandal is just the tip of the iceberg when it comes to wrongdoing by the mortgage industry. And New York Attorney General Eric Schneiderman is one of a handful of state attorneys general standing up to make sure the Wall Street crooks who illegally cheated millions of people don't get a free pass.
But the Obama administration and federal banking regulators are pressuring Attorney General Schneiderman to back down and accept a settlement with the major mortgage firms that would impose no criminal penalties for breaking the law.
As the Attorney General of New York, Eric Schneiderman has a unique opportunity and a unique obligation to stand up for the victims of unscrupulous Wall Street firms. And the Obama administration and federal regulators should stop trying to strong-arm him. 
Through congressional hearings and investigative reporting, we know of numerous stories of big financial firms engaging in shady mortgage practices, many of which seem on their face to violate various laws and regulations.
Yet the New York Times reported that Shaun Donovan, the secretary of Housing and Urban Development, and various officials in the Department of Justice are pressuring Attorney General Schneiderman to accept a settlement before any significant investigation into these violations take place.
And what's particularly galling is that the proposed settlement amounts to little more than a slap on the wrist to the people who profited massively from driving our economy off a cliff.
In exchange for fines and industry reforms (most of which arguably simply restate duties the banks already have), nobody goes to jail.
If we cave on the settlement, we send the message to giant financial firms that it's okay to rip off millions of people and make obscene amounts of money doing so. Civil penalties will simply be part of the cost doing business, the law be damned. 
It's incompatible with the health of our democracy to allow wealthy and powerful people off the hook after they have caused massive and widespread suffering. But at least one federal regulator seems to think Attorney General Schneiderman has a positive duty to do so.
Kathryn Wylde who sits on the Board of the New York Federal Reserve Bank and whose job it is to explicitly represent the public, unbelievably told the New York Times without any hint of shame that she told Attorney General Schneiderman:
"It is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street — love 'em or hate 'em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible."
This is wrong on so many levels, it's hard to articulate.
Fortunately, Attorney General Schneiderman isn't buying it. But now that he's being attacked for taking a stand, he deserves our support.
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