The Presidents Belated Mortgage Fraud/Crisis Investigation

From: The Big Picture  By Barry Ritholtz
The most interesting news from the SOTU address was the very belated appointment of a mortgage investigation task force, the Office 0f Mortgage Origination and Securitization Abuses.

You may recall that back in April of 2011, I presented to the National Association of Attorneys General a short keynote speech. It was titled “How Systemic Bank Fraud Contributed to the Financial Crisis.”In particular, you should review pages 14-17, and 22-30.

But meanwhile you may be asking why in 2012 — 4 years after the great financial collapse, 3 years after the recovery began, and in the last year of the President’s term — Mr. Obama finally decided to investigate the role of Fraud in the entire crisis.
The politics are obvious: Both Occupy Wall Street and the Tea Party were very unhappy with the bailouts, and even more unhappy with the lack of prosecutions. So its obviously good politics.

But the suspicions on the Left have already begun; consider:

• The Schneiderman Gambit: Financial Fraud Unit Appears Designed to Fail, and Grease Skids for Foreclosure Fraud Settlement (Firedoglake)
• Obama To Announce Mortgage Crisis Unit Chaired By New York Attorney General Schneiderman (HuffPo)
• Is Schneiderman Selling Out? Joins Federal Committee That Looks Designed to Undermine AGs Against Mortgage Settlement Deal (naked capitalism)
• California calls $25-billion mortgage settlement ‘inadequate’ (L.A. Times)

That is way too negative — but the suspicions of the Obama administration, and Treasury Secretary Tim Geithner aka the Banker’s friend — is not unwarranted.
What is the thought process about this? Is this the real deal investigation?   Will this commission uncover anything, or is this cover for a white wash?

What say ye?

Inflection Point says “to negative”?  Not at all.   Much of the Presidents State of the Union “Mortgage “Fix” was the same “Fix” offered 3 years ago in the same speech.  With housing prices down significantly since then, how’s that working for you?   And, to offer up a task force to prosecute fraud that has continued throughout his first three years is a Hegelian Dialectic ploy, which was pretty much the theme of the whole speech… more big government is needed to fix the problems of an over bloated and infective government.  Some day we may get it.

As negative as the Firedoglake and naked capitalism articles may appear, they fit the SOP pattern and are closer to the reality of “election year politics”. We must begin to see these things that seem impossible… they wouldn’t do that?… for what they are; a classic bait and switch.  LA Times calls the $25-billion mortgage settlement ‘inadequate’.  Cynic that I am, I think a $25-billion settlement for blatant criminal fraud, that continues to this day and is central to the loss of $8 Trillion in housing values, is just about right for a Kleptocratic leadership… Power to the Plutocracy!

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