In an attempt to please Wall Street, the Obama administration is pressuring state attorneys general to accept a deal being brokered with big banks over their illegal and unethical foreclosure practices.

 

One AG in particular, New York’s Eric Schneiderman, who assumed office this year, has been urged to come aboard on the agreement still in development which would require banks to pay billions of dollars to help homeowners modify their loans or recover from having lost their properties as a result of aggressive foreclosure actions.

 

Schneiderman and other attorneys general are balking at the proposed settlement, because, they say, it would handcuff them from going after banks in the future over mortgage-related cases.

 

The Obama administration, led by Secretary of Housing and Urban Development Shaun Donovan and high-level Justice Department officials, also is pressuring those supporting Schneiderman in the fight against banks, namely consumer groups and advocates for borrowers.

 

Schneiderman’s refusal to play ball may have cost him his seat on a committee formed by state AGs going after the banks. On Tuesday, the office of Tom Miller, the attorney general for Iowa, who is working with Donovan to craft a settlement, announced that New York’s top prosecutor had been removed from the group conducting the probe.

-Noel Brinkerhoff

 

Attorney General of N.Y. Is Said to Face Pressure on Bank Foreclosure Deal (by Gretchen Morgenson, New York Times)

2 Funny Things about Obama Administration’s Effort to Pressure Eric Schneiderman (by Marcy Wheeler, Emptywheel)

New York Attorney General Kicked Off Government Group Leading Foreclosure Probe (by Shahien Nasiripour, Huffington Post)

N.Y. Bumped from 50-state Foreclosure Committee (by Brady Dennis, Washington Post)