NY AG expects 'meaningful relief' from investigations of mortgage industry
New York Attorney General Eric Schneiderman said he expects to obtain "real meaningful relief" from his investigation of the nation's largest banks and mortgage servicers. Schneiderman, who said he wouldn't be surprised to see more investigations, was a guest Tuesday night on the "Rachel Maddow Show" on MSNBC.
The AG's rejection over the summer of a proposed 50-state settlement with the nation's major mortgage servicers over foreclosure misconduct — which became known as the robo-signing scandal — has thrust the low-key AG into the limelight in recent months but he has given few interviews.
In August, Iowa Attorney General Tom Miller, the lead negotiator in the robo-signing settlement talks with major mortgage servicers, removed Schneiderman from the executive committee for allegedly undermining its objectives.
The proposed AG settlement is said to be in the neighborhood of $20 billion to $25 billion. Attorneys general in Delaware, Nevada, California and Minnesota also have criticized the proposed settlement, citing concerns that it's too favorable to the big banks.
Schneiderman referenced his probe of mortgage securitization during the MSNBC segment, noting that he has jurisdiction as many of the mortgage securities were issued out of New York-based trusts.
Delaware AG Beau Biden recently joined Schneiderman's intervention into the proposed $8.5 billion settlement over troubled mortgage securities between Bank of America ($13.43 0.07%) and Bank of New York Mellon ($30.44 0.58%). Schneiderman mentioned Biden several times during the segment. Biden expressed reservations about the national AG settlement in late August and more recently expressed interest in Schneiderman's RMBS investigations.
"This was a manmade crisis," Schneiderman said, referencing the housing crash. "It was created by regulatory neglect and greed, and I assure you, without telling you anything about the secrets of our investigation, we haven't found a trace of evidence that a cop, firefighter, teacher or sanitation worker contributed to blowing up the American economy."
Schneiderman said he thought New York needed to "dig in a little deeper" into what caused the bubble and the crash in the housing market.
A Democrat, Schneiderman also criticized Republican presidential candidate Mitt Romney's recent comments that the nation should let foreclosures run their course so that the housing market can hit bottom and recover faster.
"This is the same sort of deregulatory mania that they were dishing out in 2005 and 2006. That didn't work so well for the economy," Schneiderman said.
While Schneiderman said safety mechanisms were dismantled which contributed to the housing crisis, he also said he's looking at the conduct of individual financial institutions and individuals to see if misrepresentations were made and whether criminal acts were committed.
"There's a sense that equal justice under the law is no longer the rule for this country," Schneiderman said. "We've got to get that back."
The sense of accountability is a key motivator in his investigations, the AG said, adding "I think there will be quite a few investigations before this is over."
Write to Kerry Curry.
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