Trumka: Big Banks' payment on mortgage settlement good first step


WASHINGTON - A $26.5 billion settlement between the states' attorneys general and big banks over the financial finagling with mortgage-backed securities - which led to the economic crash and the Great Recession - is a good first step to hold financers accountable for the wreckage, foreclosures, and evictions they caused, AFL-CIO President Richard Trumka says. It won't be the last.

The settlement, announced Feb. 9, forces the big banks to turn over the funds to settle the "robo-signing" mess: Some $5 billion to 750,000 victims of illegal bank home seizures in foreclosure where banks did not even review the documents, much less consider evidence that homeowners were current in payments.

The rest will go to mortgage relief for tens of thousands of other homeowners whose mortgages are "underwater" - worth more than the homes themselves. That still leaves other financial frauds that brought the economy down open to prosecution, Trumka and state and federal officials said. And that's very important, he added.

For example, Calif. Attorney General Kamala Harris is forcing the banks to pay an extra $12 billion to refinance mortgages at lower rates in the Golden State.

All this combined to cheer Trumka. The AFL-CIO was worried the Obama administration would go soft on the banks. He praised the attorney generals' role.

"The banks broke the law by railroading homeowners through the foreclosure process," Trumka declared. The settlement gives money to the victims "without requiring individuals to waive their legal claims. The settlement also includes needed principal write-downs, so homeowners can stay in their homes."

Trumka singled out Harris and New York Attorney General Eric Schneiderman for fighting for a tough settlement. "Because of their efforts, these banks have not been released from liability for fraud and other illegal conduct in creation of mortgage-backed securities that were central to the Wall Street financial crisis. Law enforcers can still investigate and prosecute criminal activity against the banks, and pursue broader civil claims for illegal conduct that brought down our housing market," Trumka said.

Schneiderman and Obama's Attorney General, Eric Holder, said they aren't done with the banks yet. "This will not prevent state and federal authorities from pursuing criminal prosecutions," Holder said. "I'm confident we have the jurisdiction, the resources, and the will to pursue the people who brought down the economy," added Schneiderman. A new federal task force pursuing housing finance fraud, which Schneiderman chairs, has already subpoenaed 11 financial firms for their mortgage-backed securities documents.

Photo: "Richard Trumka listens as President Obama addresses union workers." Charles Dharapak/AP

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  • THIS WEEK’S BIG NEWS, after receiving hundreds of millions of dollars in bonuses 150 Million for one alone and 90 Million for another, executives at Fannie Mae and Freddie Mac have received 100 million in for Legal Fees. The lawsuits tend to involve misleading investors about its financial health. Fannie’s case is notably egregious; its legal fees stem from court battles over its accounting misdeeds earlier last decade, which were flagrant and widespread.
    After paying banks Trillions of Dollars of tax payers’ money for Toxic Mortgages that in most cases, the Banks can't even prove they own, tax payers are now forced to pay Fannie Mae and Freddie Mac executives legal fee.
    Yet our Government couldn’t help with Legal Services for homes owners that lost their homes, stolen by banks using what ever menthe necessary to take the home breaking every conceivable ownership law. What our Government, the O’Barma Administration, every State Attorney General but one did, was to settle every case out of court for the robbed homeowner requiring the banks to GIVING THEM 1500.00 TO 2000.00 EACH.
    Fannie and Freddie execs routinely donated to Congressional campaigns "No man is above the law and no man is below it; nor do we ask any man's permission when we require him to obey it.""Obedience to the law is demanded as a right; not asked as a favor."
    Third Annual Message to Congress, December 7, 1903 Theodore Roosevelt
    The Truth is, the only State that didn't take any money was N. Dakota because it has State Owned Banks. They don't deal with the Wall Street Banksters. Their money stays in their State creating Jobs, fixing roads, etc.

    Posted by Henry, 02/23/2012 4:16pm (4 years ago)

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