The administration is close to presenting a deal with big banks on mortgage fraud—will it stick?
George ZornickThere is now no doubt that a federal settlement with five major banks over mortgage foreclosure fraud is in the end stages. A meeting took place yesterday in Chicago between the administration and representatives of every Democratic attorney general in the country, and Republican attorneys general held a conference call to discuss their strategy toward the deal as well.
The headline out of yesterday’s meeting was a statement by Iowa’s attorney general, Tom Miller, saying, “We have not yet reached an agreement with the nation’s five largest servicers, and we won’t reach a settlement any time this week.”
If opponents to the deal were heartened, they shouldn’t be. Miller also added that issues were still be resolved, and that “this is one step along the way, and it was a very productive day.” At some point relatively soon, a proposed deal will be announced. The question now is how many attorneys general go along with it, and if public pressure will convince the administration to revisit their strategy.
Delaware Attorney General Beau Biden is the only one so far to comment on the specific deal being discussed now—and, without citing a specific reason, says his state will reject it as drafted.
The other attorneys general who are investigating mortgage fraud, or have said they plan to—something that would be forbidden by this rumored deal—haven’t commented yet, but some have suggested they’re not on board. A spokesperson for California Attorney General Kamala Harris said yesterday that “Attorney General Harris has consistently and repeatedly expressed concern about protecting her ability to investigate wrongdoing in the mortgage arena, and that remains a key lens through which she will evaluate any proposals.”
Meanwhile, the public pressure continues. Outside yesterday’s meeting in Chicago, protesters called “No sweetheart deals” and “Protect our homes.” The progressive outcry and corresponding petition drive we covered yesterday continues, and has received good press coverage in the mainstream media.
Also yesterday, the group Judicial Watch announced yesterday that it has filed a Freedom of Information Lawsuit against the Department of Justice and the Department of Housing and Urban Development for documents pertaining to fraud by these large banks. If truly damaging is ultimately made public, it could deeply energize the public opposition to civil immunity.
And here’s one thing to watch for tonight in the State of the Union address: I’ve heard that Obama might devote a couple lines to the settlement. I personally don’t think he will, given that the negotiations are still under way, but if he does, we’ll know the administration is very serious about pushing this deal through.
George ZornickTwitterGeorge Zornick is The Nation's former Washington editor.