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Obama’s Late Payment to Mortgage-Fraud Victims

Posted on Jan 25, 2012
White House / Pete Souza

By Amy Goodman

In his State of the Union address, many heard echoes of the Barack Obama of old, the presidential aspirant of 2007 and 2008. Among the populist pledges rolled out in the speech was tough talk against the too-big-to-fail banks that have funded his campaigns and for whom many of his key advisers have worked: “The rest of us are not bailing you out ever again,” he promised.

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President Obama also made a striking announcement, one that could have been written by the Occupy Wall Street General Assembly: “I’m 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.”

Remarkably, President Obama named New York Attorney General Eric Schneiderman as co-chairperson of the Unit on Mortgage Origination and Securitization Abuses. Schneiderman was on a team of state attorneys general negotiating a settlement with the nation’s five largest banks. He opposed the settlement as being too limited and offering overly generous immunity from future prosecution for financial fraud. For his outspoken consumer advocacy, he was kicked off the negotiating team. He withdrew his support of the settlement talks, along with several other key attorneys general, including California’s Kamala Harris, an Obama supporter, and Delaware’s Beau Biden, the vice president’s son.

In an op-ed penned last November, Schneiderman and Biden wrote, “We recognized early this year that, though many public officials—including state attorneys general, members of Congress and the Obama administration—have delved into aspects of the bubble and crash, we needed a more comprehensive investigation before the financial institutions at the heart of the crisis are granted broad releases from liability.”

When news of Schneiderman’s appointment surfaced, sent an email to its members declaring: “Just weeks ago, this investigation wasn’t even on the table, and the big banks were pushing for a broad settlement that would have made it impossible. ... This is truly a huge victory for the 99 percent movement.”


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The stakes are very high for the public, and for President Obama. He relied heavily on Wall Street backers to fund his massive campaign war chest in 2008. Now, in this post-Citizens United era, with expected billion-dollar campaign budgets, Obama could find himself out of favor with Wall Street. For the public, as noted by the Center for Responsible Lending: “More than 20,000 new families face foreclosure each month, including a disproportionate percentage of African-American and Latino households. CRL research indicates that we are only about halfway through the crisis.”

Unanswered at this point is whether or not Schneiderman’s appointment signals his willingness to go along with the multistate settlement now said to be nearing completion. Details are not yet public, but the deal is said to involve a $25 billion payment from the largest banks as a settlement for charges surrounding problematic mortgage-loan practices like robo-signing documents and grossly inadequate loan servicing, making foreclosures more likely. Rolling Stone’s Matt Taibbi, who has been doing essential investigative reporting on the financial crisis, told me: “It doesn’t make sense for companies to settle without New York or California, since the potential liability from those two states alone could put them out of business, could cripple any of the too-big-to-fail banks.”

Obama is aware that those at the Occupy Wall Street protests around the country include many who were his most active supporters during the 2008 campaign. Does the formation of the new task force signify a move to more progressive policies, as MoveOn suggests? 

Longtime consumer advocate and former presidential candidate Ralph Nader doesn’t hold much hope: “This financial crimes unit, that’s like putting another label on a few doors in the Justice Department without a real expansion in the budget.” Delaware’s Biden expressed similar concerns about the task force, asking: “How many FBI agents are being put on it? How many investigators? How many prosecutors?”

This is the Occupy Wall Street conflict distilled. Will Eric Schneiderman’s new job lead to the indictment of fraudulent financiers, or to just another indictment of our corrupt political system?

Denis Moynihan contributed research to this column.

Amy Goodman is the host of “Democracy Now!,” a daily international TV/radio news hour airing on more than 1,000 stations in North America. She is the author of “Breaking the Sound Barrier,” recently released in paperback and now a New York Times best-seller.

© 2011 Amy Goodman

Distributed by King Features Syndicate

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By jake, January 28, 2012 at 11:27 pm Link to this comment
(Unregistered commenter)

Obama = NDAA. enough said.

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By keepyourheaddown, January 26, 2012 at 10:16 pm Link to this comment

It’s all been said here, he is all talk, the system has been completely destroyed from within… we are all doomed…

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By Albert J DAgostino, January 26, 2012 at 9:32 am Link to this comment
(Unregistered commenter)

The mass amnesia of Obama’s supporters is pandemic. For three years this spineless phony politician has thrown his supporters under the bus. Now, as elections are nearing, he is remembering his base after years of neglect. See how quickly he will abandon the foreclosure victims and kiss the hand of his bankster cronies. But, hope springs eternal especially from those whom are fooled easily. There is absolutely no reason to give this man our support, save one, and that is we could never stomach a man such as Gingrich. I never pinned much hope on Obama and I knew he would be a letdown. Obama is undeserving of another four years, it would be just more lip service and an extension of Republican and Wall Street policies. I believe the voters should throw every president out of office after their first term as a lesson to show them that the people have some power. My politics have always been radical bordering on cynicism, so I am never happy with the losers we always seem to elect. I would be perfectly happy to vote for Romney only to teach Obama and the Dems that they shouldn’t act like ReThugs and take us for granted. Romney would not be much different from Obama. Obama is a liar (I’m sounding like a Tea Bagger) as are most politicians. They continually fool many people with false promises concerning problems they can NEVER solve. There are inherent flaws in the capitalist system which they never will address, hence the re-occuring problems.
The fact that every empire from ancient to modern history has been ruled by the wealthy is a fact that seems to be lost on most people and political writers. Why, in this world if increasing competition and violence, would we think a white (or black) knight will reverse the course of history. So, dream on people and speculate about all the fantasies we hold about making this world a better place and more just. Pinning any hope on the likes of Obama or any of the fools battling for the ReThug nomination only shows our desperation. I always think of the line in an old Who song - ”we won’t get fooled again,” I just wish it was true. Is revolution the answer? Was Mao correct?

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By DonSchneider, January 26, 2012 at 8:58 am Link to this comment

and you, an ass !

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By frang, January 26, 2012 at 8:52 am Link to this comment
(Unregistered commenter)

All one has to do to determine the extent of Obama’s sincerity is to examine the makeup of the announced Unit on Mortgage Origination and Securitization Abuses as Dave Dayden has done.  In addition to Schneiderman, there is co-chair Lanny Breuer, formerly of the law firm of Covington and Burling which is the firm that provided the legal reasoning for the creation of MERS.  Still another co-chair is Robert Khuzami of the bending-over-backwards SEC and yet another is Tony West, the brother-in-law of Kamala Harris, one of the state AGs who is a holdout on the Obama administration’s proposed settlements. IMO, nothing like creating a little family disharmony for getting things to go your way.

As of November, 2011, Obama’s 2012 campaign has collected over $4 million from the FIRE sector. This seems to me to be a strong incentive to not investigate too strongly.

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By John Randolph, January 26, 2012 at 8:08 am Link to this comment
(Unregistered commenter)

I am a retired US Border Patrol Agent and I have been following the failed US backed Mexican drug war for a couple of years.  My first jaw dropper with Obama was when on May 10, 2011, when Obama gave a “hope for Latino vote” speech in El Paso, Texas. 

Obama was campaigning directly across from Ciudad Juarez which is ground zero for the Mexican drug war which has now left some 50,000 people dead.

Obama was dead silent about the drug war.

The last “jaw dropper” for me was Obama’s SOTU speech earlier this week.  Tens of thousands of occupiers have demonstrated across the land.  And in Obama’s SOTU drill ......dead silence about OWS. 

Ralph Nader and Elizabeth Warren inspire me more than the entire cast of usual suspects.

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By Leefeller, January 26, 2012 at 7:46 am Link to this comment

Regulations are said to be the problem, when it was the lack of regulations and enforcement which caused it. People being helped to keep their homes is not a bad thing, seems to me it will help the people, the community and the nation?

Obama has been fighting a political war against bigoted and economic obstructionists who have one purpose to defeat him in 2012 for various reasons, some of which are obviously clear. The hate used by the GOP is unfounded and unwarranted and very selfish in its constant blindness!

Obama gave Message to the Nation an outline which is was not weak, if Obama had the same control over domestic issues he has over world wide issues he would be the greatest president we have ever seen.

Fairness, is something the GOP does not comprehend!

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By david tarbuck, January 26, 2012 at 7:29 am Link to this comment
(Unregistered commenter)

Obama is an hypocrite.

Before elections (2008/2012)hekisses ass.

After elections (2009,10,11,13,13,14) You can kiss his.

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By DonSchneider, January 26, 2012 at 7:11 am Link to this comment

Why should we expect President Obama to be any different that FDR or Truman, or
Ike, They asked that we “make them” do what had to be done ! Now if you can’t
figure that one out, your head is too far up,( well you know where) to ever
understand !  If a leader KNOWS his/her constituents have their back, they will go
in the direction where that support lies (think XL pipeline) .  We are disappointed
in the job he is doing without thinking that we haven’t been doing our own !
I am a progressive slightly to the left of Guevera, and have not been happy with
our Presidents middle of the road path. Perchance if he knew we had his back he
and we,  would now be moving left of center seeking solutions instead of walking
a tight rope !  We have met the enemy, and he is us ! 
I am urging more of you to join in. We can “make him” see we have his back ! Let’s
start with overturning the Tea Party’s poisonous results and get to work electing
progressives !

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By SoTexGuy, January 26, 2012 at 5:50 am Link to this comment

The victims of ‘mortgage fraud’ are not the underwater home owners. Those people knew what they were buying and hoped to cash in on increasingly inflated real estate prices. The market crashed.. It’s tough.

The real victims are the investors and retirement funds and more, world wide, duped into buying low-grade derivatives and other paper packaged from high risk mortgages. The paper that the ratings firms, in collusion with the investment banker/gamblers certified as AAA knowing it was not.

Want to help home owners at risk of foreclosure and prop up the real estate market? JOBS .. good paying jobs with some security. What Obama and Treasury will do will be marketed as a ‘homeowner’ bailout.. it will be another blank check for the banks and derivatives firms..

Obama wants to help homeowners and average people? Make good on his campaign promise to raise wages in America! Don’t be fooled by any talk from Obama or his people or most anyone in Congress.. Whatever they do is for the international bankers and speculators.


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By progressiveGreene, January 26, 2012 at 2:22 am Link to this comment
(Unregistered commenter)

Until we see Wall Streeters frog-marched to jail in
hand cuffs and poor people allowed to stay in their
homes, all Obomber’s words are just campaign rhetoric. 
Actions speak louder.  Thank You Amy!

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By Blueokie, January 26, 2012 at 1:22 am Link to this comment

There was a little thing called the Financial Fraud Task Force formed by Congress in 2009 as part of the Democrats illusion that they were actually going to work for the people and not Wall Street.  Obviously they were never meant to find any wrong doing as Obama and the Dims have spent most of the last few years protecting Wall Street above all.  (Remember in his recent 60 Minutes interview he said “Wall Street acted unethically, but not illegally.”)  This new “Commission” is nothing more than empty campaign rhetoric from Obamafraud.  As for Obama not taking Wall Street money in large amounts this year, just a few weeks ago he was in New York for four “fundraisers” with Wall Street, with prices of admission ranging from $35,000 to $5000, he has raised more Wall Street money than the combined Republican field.  Undoubtedly one of the things discussed in the closed fundraisers was the States Attorneys General lawsuits against the big banks that Obama has been trying to get settled for much less than pennies on the dollar and shield them from any further investigation.  (The White House was working feverishly the last few days before the SOTU to get this done so he could announce it in the speech and take another false victory lap as he did when he failed to get the Iraqis to agree to unlimited occupation then took credit for “ending” the war or for “cutting” the Pentagon budget when he actually just didn’t increase it as much as he initially wanted.  He has spent more on war than Bush.)  By the way, the big Wall Street banks have made more profit in Obama’s first 2 1/2 years than they did in 8 under Bush.  If you want to delude yourself with the idea that Obama and the DNC will stand between you and the Corporate State at least pick a more credible symbol like say the Easter Bunny.  The many other falsehoods in the SOTU are extensive and I’m sure we’ll get to them but for now let me leave you with this; Glass-Steagall, which protected the Nation and economy from rapacious predatory capitalism for 70 years was only 36 pages long.  The Democrats fraudulent Dodd(lobbyist)-Frank Wall Street protection bill was 2600 pages.  It takes a much bigger bill to have loopholes large enough to drive Mac trucks through.

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By bluewombat, January 26, 2012 at 1:22 am Link to this comment
(Unregistered commenter)

After three years of being MIA on Wall Street piracy and issues of economic justice, Obama dusts off his populist rhetoric for another campaign, to be put in mothballs once again when (or rather, if) he wins.

What a charismatic, eloquent con man. Rocky Anderson for President!

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By Shenonymous, January 25, 2012 at 10:39 pm Link to this comment

Goodman gave Obama a fairly good review.  Better than expected. 
It is true that he used Wall Street money in 2008, it was the manner
of funding campaigns then.  And it was before the Supreme Court
named corporations persons.  But he did also receive significant
small donations from individuals.  It is obvious, campaign finance
reform will have to be thrashed out, if that has not become clear this
past year, it never will be.  And ironically the Republicans have been
burned by the unlimited funds that have come pouring into the
clownish candidates.  Obama himself has pretty much disenchanted
further or not very much financial support from big American money. 
He has been raising money at fundraisers a number of times that will
offset that loss.  It was definitely a populist political speech. We will
have to wait and see if in this year he will stand strong to his word
on all the themes he outlined of the problems that face the country.

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By rumblingspire, January 25, 2012 at 8:48 pm Link to this comment
(Unregistered commenter)

Obama, your pants are on fire!  You are not going to fool me twice.

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