New York Attorney General Eric Schneiderman has been a thorn in the side of the Obama Administration, blocking its efforts — supported by many state attorneys general — to work out a settlement on mortgage servicing claims against the big lenders.Now, Huffington Post’s Sam Stein reports, Obama is launching an investigation of the mortgage crisis — led by one of the finance industry’s sharpest critics:
WASHINGTON — During his State of the Union address tonight, President Obama will announce the creation of a special unit to investigate misconduct and illegalities that contributed to both the financial collapse and the mortgage crisis.
The office, part of a new Unit on Mortgage Origination and Securitization Abuses, will be chaired by Eric Schneiderman, the New York attorney general, according to a White House official.
Schneiderman has been blocking a settlement on mortgage servicing lawsuits sought by many state attorneys general and the federal government, and the move raised the question of whether he had been persuaded to sign on. A source close to the arrangement, however, said Schneiderman has not agreed to the settlement.
“This is major important victory for progressives,” said a Schneiderman ally. “Given his stature and the role he’s carved out nationally on this issue, gives this investigation immediate legitimacy.”
“This is also a major victory for Eric and all the AG’s who were pushing for a comprehensive investigation by the federal government,” the ally said.
And the deal won instant praise from the left.
“This is a huge deal for the American people and the biggest victory yet for the 99%,” said MoveOn executive director Justin Ruben. “By launching this investigation, President Obama will take a crucial step towards holding the 1% on Wall Street accountable for the big bank fraud that nearly torpedoed the economy.”