You wouldn’t think the leader of the free world would be so willing to outsource a massive foreclosure scandal to state attorneys general, judges, regulators and the big banks that created the mess in the first place.
But that’s exactly what President Obama has done, standing aside while 50 state attorneys general launch investigations, while banks implement their own voluntary moratoriums, announcing they have halted some, but not all, foreclosure proceedings.
A growing number of politicians, civil rights and consumer groups and labor unions have called for a nationwide moratorium amid allegations that banks violated foreclosure laws by using sloppy, false or fraudulent paperwork to kick people out of their homes.
But President Obama doesn’t like the idea of a foreclosure moratorium, which he fears could put the kibosh on his fragile recovery.
Where is the administration’s effort at finding some other creative solution to the mess the big banks have created across the country? What we find instead are regulators that have been ignoring clear warning signs about the banks’ troubled foreclosure crisis.
The federal response so far has been limp at best: a Justice Department inquiry (short of an investigation) and a call by a federal regulator for the banks to voluntarily verify that their foreclosure paperwork is in order.
Recent press reports call into question whether the banks have even implemented the foreclosure moratoriums they promised. Meanwhile more banks, this time Wells-Fargo, acknowledge they have also violated the laws governing foreclosure by submitting unverified documents to take people’s homes. Isn’t there an election coming up where the Democrats are fighting to maintain control of Congress, with their entire agenda at stake? Isn’t there already one party that has expertly cornered the whole do-nothing stick-your-head-in-the-sand approach to unemployment and foreclosure? Doesn’t the president know how awful it looks to most people to have the bailed-out banks getting away with yet more hanky-panky?
You would think the president would want to appear more engaged in this issue that’s so close to the heart of our on-going economic troubles.
His treasury secretary fears “unintended consequences”. Apparently the administration would prefer the banks continue to foreclose on people using phony documents. While Wall Street predicts a catastrophe if a moratorium is implemented. If the big bankers want to know who created a catastrophe that will cost them billions, they only need to look in the mirror.