What is Attorney General Schneiderman’s record on the foreclosure crisis?
Today, New York Attorney General Eric T. Schneiderman, along with U.S. Attorney General Eric Holder, announced the formation of a working group of federal and state officials that will investigate institutions involved in the pooling and sale of residential mortgage-backed securities. President Obama first aired this initiative in this week’s State of the Union Address. The sale of residential mortgage-backed securities to investors led to the financial crisis and millions of home foreclosures nationwide, but officials have had limited success in holding responsible parties accountable.
The New York World would like to know: What is Schneiderman’s record as New York Attorney General on the foreclosure crisis?
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What we found
Schneiderman was chosen to lead this group for good reason: as attorney general of the state where some of the biggest financial institutions are headquartered, his job allows him to investigate these financial behemoths.
Josh Zinner, the co-director of Neighborhood Economic Development Advocacy Project, which does research and advocacy on behalf of financial services consumers, said it’s encouraging to see Schneiderman heading the group because he has opposed previous deals that were seen as soft on banks by advocates. ”He’s given every indication they’re going to seek the strongest relief for homeowners,” said Zinner. “Any settlement that comes out of this investigation has to have at its focus relief for homeowners and bolstering lower-income communities.”
Most notably, Schneiderman was involved with most of the attorneys general around the country in developing a proposed settlement with five major banks over robo-signing and other mortgage-related misconduct. Worth up to $25 billion, the deal would require banks to offer much-needed relief to struggling homeowners, such as modifications and refinancing. But Schneiderman and a handful of other attorneys general opposed the preliminary deal and contested it let the banks off too easily.
Last year, Schneiderman began a separate investigation of the mortgage securities operations at Bank of America, Goldman Sachs and Morgan Stanley. At the same time, he partnered with Delaware Attorney General Joseph R. Biden III in investigating Bank of New York Mellon and Deutsche Bank to ensure that bundled mortgages sold to investors had been properly documented.
Reports from today’s announcement indicated the new task force has already sent subpoenas to the 11 largest financial institutions in its investigation of mortgage-backed securities fraud. The group – which includes the Securities and Exchange Commission and the U.S. Department of Housing and Urban Development – aims to secure compensation for homeowners and investors alike.