As a result of Schneiderman’s holdout, on Aug. 24 it was reported that he was “removed from a leadership role in negotiating a nationwide foreclosure settlement with U.S. banks.”
Iowa Attorney General Tom Miller, who is heading the executive committee, accused Schneiderman of “actively working to undermine the very same multistate group that it had spent the previous nine months working very closely with.”
Bravo, Mr. Attorney General!
There is no question that the major banks contributed to the economic and housing crisis that Americans are now enduring. Many of these banks have been accused of forging signatures, using fabricated or improperly altered documents and “robo-signing,” in which individuals who work for the bank sign thousands of mortgage assignments at a time without reading or scrutinizing the information.
In many cases, large banks sold mortgages to Fannie Mae, where they were repackaged and sold again to investors. This greed allowed unqualified borrowers to get loans and purchase homes they could not come close to affording.
Last Friday, Fannie Mae and Freddie Mac announced that they were preparing to sue some of the largest banks in a bid to recoup billions of dollars in losses from these failed investments. Both mortgage giants are claiming that the large banks misled investors on the quality of their loans.
We’re still in the middle of a housing crisis, and there’s no light at the end of the tunnel. Approximately 1.2 million homes will be repossessed in 2011, the most on record. Our economy is crippled. Job reports indicate that August was one of the worst months of the year. No new jobs were added, and the nation’s unemployment rate remained at 9.1 percent.
How have the banks been punished? They haven’t been. They received an estimated $1.2 trillion in loans from the Federal Reserve. And what about the people who were deceived by the banks? They were left with their houses in foreclosure!