Things are going about as expected for New York Attorney General Eric Schneiderman when he decided to take on the full brunt of the White House and the largest megabanks in the country by trying to investigate the full load of their mortgage-related crimes over the past decade: Somewhat difficultly.
The Obama administration, in coordination with a group of all 50 state attorneys general, is trying to wrap up the multibillion dollar settlement with Bank of America, Wells Fargo, Citigroup, JP Morgan Chase and others over "dubious" (fraudulent and widespread) mortgage servicing practices, like improperly "robo-signed" foreclosure documents and illegal seizures, that were being used to remove people from their homes until scandal erupted last year. The White House is trying to get the banks to fork up some cash to affected homeowners in exchange for immunizing them from further liability that could result from any additional or ongoing investigations into their sloppy crimes over the years. It's a perfect, if not the perfect, example of the adminstration's signature policy of modest conciliation to remove a heated issue from the table, quickly, without examining the inconvenient roots of the problem.
Schneiderman, as New York AG, is obviously an important figure in the 50-state group, since these banks are headquartered in his jurisdiction. He's been pressuring the other AGs to reject this deal, "saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities," as the Times reported in a major report this week about how much the Obama administration, namely HUD Secretary Shaun Donovan, hates him.
But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general's participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation.
Not surprising, the large banks, which are eager to reach a settlement, have grown increasingly frustrated with Mr. Schneiderman. Bank officials recently discussed asking Mr. Donovan for help in changing the attorney general's mind, according to a person briefed on those talks.
And just yesterday we learned from the Huffington Post that many — but not all! — of Schneiderman's fellow AGs are losing patience with him:
WASHINGTON — New York Attorney General Eric Schneiderman on Tuesday was kicked off the committee leading the 50-state task force charged with probing foreclosure abuses and negotiating a possible settlement agreement with the nation's five largest mortgage firms, according to an email reviewed by The Huffington Post.
Schneiderman, as of now, is still holding out on the deal and promises to continue his ongoing investigation into all sketchy bank mortgage practices, which, as he writes, "cannot be shut down to accommodate efforts to settle quickly and give banks and others broad immunity from further legal action."
How long until an Eric Schneiderman sex scandal randomly makes its way to the news?
[Image via AP]