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And some people say Obama doesn't do anything.....
ReutersBy Aruna Viswanatha and James Vicini | Reuters – 4 hrs ago
WASHINGTON (Reuters) - The Justice Department issued civil subpoenas to 11 financial institutions as part of a new effort to investigate misconduct in the packaging and sale of home loans to investors, Attorney General Eric Holder said on Friday.
Holder declined to provide specifics, including the names of the firms.
"We are wasting no time in aggressively pursuing any and all leads," Holder said at a news conference announcing details of a new working group to investigate misconduct in the residential mortgage-backed securities (RMBS) market, "you can expect more to follow."
President Barack Obama said he directed Holder to create the new unit in his State of the Union speech late Tuesday, saying it was needed to "help turn the page on an era of recklessness."
On Friday a slew of federal and state officials appeared at the news conference to provide details about the new group.
Housed within an earlier financial fraud task force that Obama created in 2009, it is expected to be staffed with around 50 attorneys, analysts and agents, officials said.
Some skeptics have questioned whether the new group is largely a political move because the other fraud task force already exists.
Also, the Obama administration has received heat from left-leaning activist groups that believe a separate effort to investigate misconduct in processing foreclosures and servicing home loans may not be rigorous enough to extract a meaningful settlement.
In exchange for providing up to $25 billion in housing relief, much in the form of cutting mortgage debt for distressed borrowers, the top U.S. banks are expected to put behind them government lawsuits about lending and servicing abuses - but not securitization claims.
The banks involved in the discussions include Bank of America, Wells Fargo & Co, JPMorgan Chase & Co, Citigroup and Ally Financial Inc.
Those talks have dragged into their second year as some states, including California and New York, criticized the direction of the negotiations and said the proposed settlement would release the banks from too many claims.
The deal appears to be getting closer, with last-ditch efforts to lure the hold-out states to join.
California has said it still has reservations about the deal, but California Attorney General Kamala Harris has met in recent weeks with federal officials in Washington to discuss her concerns about the settlement, people familiar with the matter said.
The attorney general in New York, Eric Schneiderman, was named as a co-chair of the new working group, prompting speculation that the position was partly aimed at persuading him to join the settlement.
In an interview with Reuters, Schneiderman said: "The releases have become narrow enough so that I'm confident a full investigation can go forward." Asked if he was signing on, he said, "Not yet," because "other issues" are still outstanding.
MULTIPLE EFFORTS
At the news conference, U.S. Housing and Urban Development Secretary Shaun Donovan also said that the multistate deal will not prevent the working group from pursuing its own claims about the securitization of home loans.
"We would not be standing here today if we weren't absolutely confident that the releases that are being contemplated were quite narrow, focused on the conduct that was actually investigated," Donovan said.
"There will be concrete actions taken in the next few weeks to confirm we're serious," Schneiderman added in the interview.
Exactly what the new group will tackle is unclear, since the construction and sale of mortgage securities is already the subject of massive government and private lawsuits.
"The simple fact is that this is an election year, and politics will inevitably play a role in every aspect of what is at its core a superfluous investigation," said Richard Gottlieb, who heads the financial industry group at the law firm Dykema.
"Others have already done the leg work, the lawsuits have already been filed, and the courts will already be deciding these issues," said Gottlieb.
The Federal Housing Finance Agency, for example, which oversees Fannie Mae and Freddie Mac, sued 17 large banks last September over losses on about $200 billion of subprime bonds and said the underlying mortgages did not meet investors' criteria.
Speaking at the news conference, U.S. Securities and Exchange Commission enforcement director Robert Khuzami said his agency has already reviewed 25 million pages of documents on related investigations.
"To be clear, investigations into RMBS offerings have been ongoing at the SEC," Khuzami said.
Holder said the Justice Department had discussed the subpoenas with the SEC, and said the new requests do not duplicate earlier efforts from the SEC.
He also responded to criticism that federal enforcers have brought few marquee cases in the aftermath of the financial crisis. Holder said the department has brought around 2,100 mortgage-related cases.
"The notion that there has been inactivity over the course of the last three years is belied by a troublesome little thing called facts," Holder said.
Several top banks, including Bank of America, Citigroup, JPMorgan, RBS Americas and Deutsche Bank, declined to comment when contacted by Reuters about the new working group's efforts.
(Reporting By Aruna Viswanatha and Jim Vicini in Washington, D.C. and Karen Freifeld in New York; Editing by Tim Dobbyn and Matthew Lewis)
ReutersBy Aruna Viswanatha and James Vicini | Reuters – 4 hrs ago
WASHINGTON (Reuters) - The Justice Department issued civil subpoenas to 11 financial institutions as part of a new effort to investigate misconduct in the packaging and sale of home loans to investors, Attorney General Eric Holder said on Friday.
Holder declined to provide specifics, including the names of the firms.
"We are wasting no time in aggressively pursuing any and all leads," Holder said at a news conference announcing details of a new working group to investigate misconduct in the residential mortgage-backed securities (RMBS) market, "you can expect more to follow."
President Barack Obama said he directed Holder to create the new unit in his State of the Union speech late Tuesday, saying it was needed to "help turn the page on an era of recklessness."
On Friday a slew of federal and state officials appeared at the news conference to provide details about the new group.
Housed within an earlier financial fraud task force that Obama created in 2009, it is expected to be staffed with around 50 attorneys, analysts and agents, officials said.
Some skeptics have questioned whether the new group is largely a political move because the other fraud task force already exists.
Also, the Obama administration has received heat from left-leaning activist groups that believe a separate effort to investigate misconduct in processing foreclosures and servicing home loans may not be rigorous enough to extract a meaningful settlement.
In exchange for providing up to $25 billion in housing relief, much in the form of cutting mortgage debt for distressed borrowers, the top U.S. banks are expected to put behind them government lawsuits about lending and servicing abuses - but not securitization claims.
The banks involved in the discussions include Bank of America, Wells Fargo & Co, JPMorgan Chase & Co, Citigroup and Ally Financial Inc.
Those talks have dragged into their second year as some states, including California and New York, criticized the direction of the negotiations and said the proposed settlement would release the banks from too many claims.
The deal appears to be getting closer, with last-ditch efforts to lure the hold-out states to join.
California has said it still has reservations about the deal, but California Attorney General Kamala Harris has met in recent weeks with federal officials in Washington to discuss her concerns about the settlement, people familiar with the matter said.
The attorney general in New York, Eric Schneiderman, was named as a co-chair of the new working group, prompting speculation that the position was partly aimed at persuading him to join the settlement.
In an interview with Reuters, Schneiderman said: "The releases have become narrow enough so that I'm confident a full investigation can go forward." Asked if he was signing on, he said, "Not yet," because "other issues" are still outstanding.
MULTIPLE EFFORTS
At the news conference, U.S. Housing and Urban Development Secretary Shaun Donovan also said that the multistate deal will not prevent the working group from pursuing its own claims about the securitization of home loans.
"We would not be standing here today if we weren't absolutely confident that the releases that are being contemplated were quite narrow, focused on the conduct that was actually investigated," Donovan said.
"There will be concrete actions taken in the next few weeks to confirm we're serious," Schneiderman added in the interview.
Exactly what the new group will tackle is unclear, since the construction and sale of mortgage securities is already the subject of massive government and private lawsuits.
"The simple fact is that this is an election year, and politics will inevitably play a role in every aspect of what is at its core a superfluous investigation," said Richard Gottlieb, who heads the financial industry group at the law firm Dykema.
"Others have already done the leg work, the lawsuits have already been filed, and the courts will already be deciding these issues," said Gottlieb.
The Federal Housing Finance Agency, for example, which oversees Fannie Mae and Freddie Mac, sued 17 large banks last September over losses on about $200 billion of subprime bonds and said the underlying mortgages did not meet investors' criteria.
Speaking at the news conference, U.S. Securities and Exchange Commission enforcement director Robert Khuzami said his agency has already reviewed 25 million pages of documents on related investigations.
"To be clear, investigations into RMBS offerings have been ongoing at the SEC," Khuzami said.
Holder said the Justice Department had discussed the subpoenas with the SEC, and said the new requests do not duplicate earlier efforts from the SEC.
He also responded to criticism that federal enforcers have brought few marquee cases in the aftermath of the financial crisis. Holder said the department has brought around 2,100 mortgage-related cases.
"The notion that there has been inactivity over the course of the last three years is belied by a troublesome little thing called facts," Holder said.
Several top banks, including Bank of America, Citigroup, JPMorgan, RBS Americas and Deutsche Bank, declined to comment when contacted by Reuters about the new working group's efforts.
(Reporting By Aruna Viswanatha and Jim Vicini in Washington, D.C. and Karen Freifeld in New York; Editing by Tim Dobbyn and Matthew Lewis)
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