Eleven financial institutions have been subpoenaed by a new mortgage investigative unit assembled to examine fraud related to mortgage originations and securitizations. The unit was mentioned as part of President Obama's State of the Union address this week.
HousingWire is reporting that New York Attorney General Eric Schneiderman, co-chair of the unit, will be joined in the effort by attorneys general Beau Biden of Delaware, Martha Coakley of Massachusetts, Catherine Cortez Masto of Nevada, Kamala Harris of California, and Lisa Madigan of Illinois.
U.S. Attorney General Eric Holder has also indicated that an additional 15 lawyers and investigators are working with the task force, as well as the FBI and SEC.
“We have jurisdiction to go after every aspect of the mortgage bubble and the crash of the financial market,” Schneiderman said. “We have jurisdiction over every MBS issued over the last decade with Delaware and New York joining the group.”
News of these subpoenas comes at the same time of news that a $25 billion settlement between all U.S. attorneys general, the adminstration, and the country's largest banks may, once again, be in the works. Earlier this week, rumors that a final settlement was imminent and would be announced during the State of the Union were quelled amid a swift call for more bank culpability from advocates. The settlement was not mentioned in the president's address.
The settlement will reportedly involve a release from liability for mortgage servicing issues, including robo-signing, an easiily-identifiable type of misconduct for presecutors. But, in potentially good news for those calling for more punitive measures, banks will not be immune from criminal liability, tax liability, fair lending, fair housing, or other civil rights claims, and more.
Photo courtesy The White House via Flickr