There is no singular public official who bears the entire burden for failure to prosecute banks during the foreclosure crisis. However, many of them do have some responsibility, considering some 9.3 million American families lost their homes during the late Bush and most of the Obama years, just before, during and after the housing market crashed.
There was a perfect storm of wrongdoing by lenders, brokers and others – including inflated appraisals, falsified underwriting and improper placement into subprime loans, which all led to misconduct and fraud in loan servicing, securitization, foreclosures and loan modification. Millions of phony documents were used as evidence to secure eviction. In other words, there was unlawful fraud going on in every step of the process. And despite this, there was very little accountability by those in power which, at the time, were mostly Democrats.
Case-in-point, as noted recently by The New Republic, is Kamala Harris. As the previous attorney general (now serving as a U.S. senator), Harris overrode a recommendation from state prosecutors to pursue civil enforcement action against OneWest Bank, a company under the direction of now-treasury secretary Steven Mnuchin, accused of repeatedly violating state foreclosure laws. Harris declined to provide a reason for this, and it has caused many even on the left to view her with great skepticism.
Remember that the housing bubble crisis launched us into a dire recession and decimated the finances of countless people – particularly those in poor and minority communities. Yet those at the highest echelons of law enforcement and prosecution failed to stand up to powerful bankers, who essentially got away with it all.
Even if Harris had gone after OneWest, Mnuchin was never in any real danger of a criminal indictment or conviction – not the way we prosecute petty thieves. At most, we might have seen the company (really, it’s shareholders) pay a sizable fine. It’s also possible Mnuchin might not have landed his current job overseeing federal banking policy. But Harris never even allowed it to move that far.
She isn’t alone in these types of cop-outs. Former U.S. Attorney General Eric Holder only ever sought light punishment for major financial crimes. Other state attorneys general who did pursue fraud foreclosure investigations ended up either garnering 90 percent less relief to homeowners than originally promised or cobble together bank crimes “task forces” that thus far have no real results to show for it. This is all despite piles of evidence documenting these crimes.
Compare this to the 1980s savings and loan crisis, wherein 1,000 banking executives were convicted of crimes and imprisoned.
Meanwhile, as our Miami foreclosure defense attorneys know, people are still regularly thrown out of their homes thanks to court orders secured with false or forged documents.
This has led to consternation from homeowners on both sides of the political aisle, and may well have given fuel to the surprising rise of Donald Trump.
If politicians from both sides stand a chance of gaining or maintaining their positions, they could start by prioritizing the rights of homeowners – and accountability for the banks.
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs|Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.
The Left’s Misguided Debate Over Kamala Harris, Aug. 8, 2017, By David Dayen, The New Republic
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Closing the Income Inequality Gap with Antitrust Law Enforcement, July 19, 2017, Miami Foreclosure Attorney Blog