NEW YORK (MintPress)—At long last, President Obama has indicated that he recognizes he needs to do more about the mortgage crisis, especially as he seeks reelection, and is taking heed of the Occupy movement’s demands.
Announcing a federal investigation into Wall Street in his 2012 State of the Union Address, the President revealed, “I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.”
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Welcomed by progressives
MoveOn.org, one of the largest progressive organizations in the country, has hailed the move, saying that “President Obama did exactly what hundreds of thousands of us have been calling on him to do.” MoveOn.org, which often works closely with Occupy Wall Street, called it “truly a huge victory for the 99% movement.”
MoveOn members have signed petitions, made calls and held up signs for months in an effort to pressure the President not to rush into a sweetheart deal with the big banks over questionable practices.
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NY Attorney General defiant
Activists are also overjoyed that New York Attorney General Eric Schneiderman is co-chairing the new Unit on Mortgage Origination and Securitization Abuses, along with the Assistant Attorney General for the Crminal Division, Lanny Breuer and other SEC and Justice Department officials.
Schneiderman, a progressive darling, has previously gone head to head with the administration in pushing to bring the banking industry to task. He was removed as the head of a panel negotiating a settlement with financial institutions over the mortgage meltdown after he was accused of undermining the group’s work.
After his appointment, Schneiderman released a statement thanking Obama for “moving to bring justice for the victims of the misconduct that caused the mortgage crisis.” He later tweeted, “We will continue our steadfast commmitment to hold those responsible for the economic crisis aaccountable/bring justice to homeowners #SOTU.
Words that undoubtedly sent a chill through spines of Wall Street honchos while comforting Obama’s liberal critics who say he hasn’t done enough. New York City Public Advocate Bill de Blasio tweeted in response, “Tonight, predatory lenders were put on notice when @AGScheiderman was named to lead investigation into mortgage crisis.”
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Perfect timing
News of the investigation comes amidst reports of a potential deal between the five biggest banks, the Obama administration and the state attorneys general. The terms stipulate that banks would agree to follow existing laws against abusive foreclosures and set aside $25 billion to both homeowners who owe more on their mortgage than their home is now worth or who were wrongfully foreclosed.
There are still, however, major disagreements over how much legal immunity would be granted to banks accused of wrongdoing, and many critics of the deal believe without an investigation real accountability wouldn’t be possible.
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Moving Forward
Obama’s action shows that he plans to take a far more combative, populist approach in the future, but he will have to stick the course if he is to maintain the support of organizations like MoveOn.org.
“While this is a big win, it isn’t enough all by itself,” said the group in a statement. “We still need to keep a close eye on the investigation, make sure top bankers don’t escape prosecution, and keep fighting for real solutions for he 11 million underwater homeowners who are still struggling to keep their homes.”
Source: MintPress