New York AG is Being Increasingly Pressurized to Discontinue his Opposition to the Broad Settlement
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The AG of New York, Eric Schneiderman, is increasingly pressured by the Obama government to discontinue his opposition to the broad range of settlements that the other state attorneys general are reaching with the banks regarding their foreclosure operations.
According to insiders Shaun Donovan, the secretary of HUD, along with other officials from the Justice Department, they have been trying to convince the New York AG to drop his opposition to the settlement being reached.
Schneiderman, along with other prosecutors from different states, are opposed to the settlement attempting to be reached with the mega banks because it would stall ongoing investigations that will lead to subsequent prosecutions in multiple areas of the mortgage sector – from the origination of mortgages to securities.
But Donovan and others with him are desperately trying to contact not only Schneiderman but other like-minded attorneys general.
It is also not surprising that many of the big banks eager to come to a broad settlement are frustrated by the attitude of Schneiderman and others like him, such as consumer advocates and housing activists calling for in-depth investigations.
Speaking at an interview, Donovan attempted to justify his stand in trying to put pressure on Schneiderman. He argued that delay would hurt the homeowners. However, he did not hasten to add that he had not held talks with the officials of the banks regarding his attempts to reach Schneiderman.
Donovan also said that, “Eric and I agree on a tremendous amount here. The disagreement is around whether we should wait to settle and resolve the issues around the servicing practices for him – and potentially other AGs and other federal agencies – to complete investigations on the securitization side”.
Donovan explained that Schneiderman should push hard for his case because it would give him a tighter hold on the banks. On the other hand, a tremendous opportunity has come to assist innumerable borrowers. There is now a way for them to keep their homes, clean up neighborhoods as well as keep the property market afloat; this chance should not be ignored.
Speaking on behalf of the Department of Justice, Alisa Finelli said that the department along with other federal agencies partnering in these investigations is “committed to achieving a resolution that will hold services accountable for the harm they have done consumers and bring billions of dollars of relief to struggling homeowners”. Finelli stressed that this relief has to be brought quickly because of the pain the homeowners are enduring with each passing day.
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