Are the Big Banks Off the Hook for Mortgage Fraud?
NOTE: This is a guest post from Karen Nussbaum, Executive Director of Working America.
Last week, 49 state Attorneys General reached a mortgage settlement deal that makes the banks pay $26 billion for their role in the nationwide foreclosure crisis.
The deal is, at best, akin to putting a Band-Aid on a broken leg. Wall Street and the wealthiest power brokers did work feverishly, and spend freely, to buy themselves a sweetheart deal and get immunity against future lawsuits stemming from abuses yet to be fully investigated. But our nation’s Attorneys General could have done much more. The $26 million is just a drop in the bucket compared to the $700 billion total loss in home value.
Luckily, one attorney general is still fighting. New York Attorney General Eric Schneiderman filed an independent lawsuit to hold several of the nation’s biggest banks accountable for defrauding potentially tens of millions of homeowners through “a wide range of deceptive and fraudulent foreclosure filings.” Here’s a telling quote from his press release:
“Our action demonstrates that there is one set of rules for all — no matter how big or powerful the institution may be.”
Schneiderman’s lawsuit isn’t the only hopeful sign that the big banks responsible for bringing the economy to its knees will get more than a slap on the wrist. During the State of the Union address, President Obama announced a full investigation into mortgage bank fraud and abuses — and tapped Schneiderman to help lead it.
This is a huge step in the right direction, fueled by a wave of public outrage. And it brings us closer to keeping millions of people in their homes and to imposing real penalties on the bad banks that enriched themselves at the expense of average American families.
But it’s just that — one step toward relief.
That’s why it’s so vital to keep up the public pressure that is so central to the progress being made.
Working America is one of the groups that, alongside Care2 activists, has played a huge role in mobilizing people across the country to demand justice for the families hit hardest by Wall Street’s greed and recklessness.
In recent days, tens of thousands of Working America members have pushed the White House and state Attorneys General for a full investigation of fraud and abuse in the mortgage industry.
But despite the promising signs, the lenient settlement deal makes clear that there is much more to be done — and everyone has a part to play. We cannot let up on the pressure and we cannot allow another bank bailout, or a slap on the wrist.
To get involved, join thousands of Working America members in standing shoulder to shoulder with Attorney General Eric Schneiderman as he works to make the worst mortgage abusers pay.
Working America’s 3 million members believe working families deserve good jobs, affordable health care, secure retirement and respect at work. The group provides tools, research, information and assistance that make a real difference for working families.