President Barack Obama has proven willing to do something Gov. Andrew Cuomo has so far been reluctant to do: give Attorney General Eric Schneiderman more investigatory powers.
The president recently tapped Schneiderman to co-chair a new joint mortgage-fraud investigation unit, giving him access to more resources and more ground troops to go after fraud and abuse on Wall Street. The move came as a shock to many, considering Schneiderman has been one of the most vocal critics of the White House’s attempts to finalize a settlement with the major U.S. banks over mortgage securities.
Schneiderman spoke to City & State about his new responsibilities, his predictions on a final settlement and his fluctuating relationship with Cuomo’s office.
City & State: Were you surprised by the president’s announcement?
Eric Schneiderman: We had been talking about the possibility for a joint collaboration for a long time, so I wasn’t surprised in that sense. I was pleased to be asked, and honored to be asked, and [I’ve been] working very hard with my colleagues ever since.
C&S: Why now?
ES: From my point of view, when I took over as attorney general, I learned that there was a multistate investigation by a fairly large group of AGs, and that they were attempting to negotiate a settlement with a bunch of banks over abuses in the foreclosure process. I also learned that the banks, understandably enough, wanted as broad of a release as possible that grants them immunity from all of their alleged misconduct. Stuff that had nothing to do with foreclosure abuses, things that created the bubble in the housing market and brought about the crash. I took a hard line that we shouldn’t release that sort of conduct and we shouldn’t release claims that haven’t been investigated, and started my own investigation. Over the course of going back and forth with my federal counterparts about our investigation and their efforts to negotiate a settlement, it became clear that there were some areas that we could do a lot of really good work on if we collaborated. There were a variety of federal agencies that had different pieces of the puzzle. We agreed that a cooperative investigation was the way to go. Took us a while to work out some of the details. And last week I was very proud to be there when it was announced. And the goals of the effort really are to establish accountability and hold people accountable, those who caused this harm, make sure we get relief to the millions of people who are injured. In New York, one in 10 homes is headed toward foreclosure. Nationally there are 15 million families that are underwater. That means their homes are worth less than the mortgages they’re trying to carry.
To read the full interview with Attorney General Eric Schneiderman, head to City & State.
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