Schneiderman: New Foreclosures Surge Underscores Need For Aggressive Wall Street Focus
New data revealed today shows home foreclosure filings in NYS skyrocketed 37 percent in August from month before
While Dan Donovan has promised to shift focus away from Wall Street fraud & abuse, Eric Schneiderman will aggressively protect homeowners & consumers
NEW YORK – Today’s new data showing home foreclosures skyrocketing by 37 % this month across New York State underscores the need for the next Attorney General to maintain an aggressive focus on Wall Street malfeasance, Eric Schneiderman said today. Schneiderman contrasted his vision with Republican Dan Donovan, who has promised a cautious approach and said his goal is not to “disturb the garden” of Wall Street.
“Dan Donovan is a decent man, but he and I simply have an honest disagreement on this important public policy issue,” Attorney General nominee Eric Schneiderman said today. “While Mr. Donovan promises Wall Street titans and mortgage brokers that he does not believe in aggressive oversight of banks and financial institutions, these very institutions threaten to throw more and more New Yorkers out of their homes and onto the streets. As Attorney General, I will continue Andrew Cuomo’s aggressive but fair tradition of standing up to powerful interests so that everyone in this state has equal justice and protection from their government.”
According to the Albany Business Review:
* Home foreclosure filings in New York rose nearly 37 percent in August compared to the month before, a much sharper increase than the rate for the United States;
* Over 4,800 New York homeowners received a foreclosure filing during the month;
* 532 properties were seized;
* On a national scale, foreclosure filings increased 4%, and over 50,000 Americans lost their homes.
While there are many causes to home foreclosures, Wall Street practices, including phony credit ratings, the false marketing of mortgage-backed securities, and credit default swap abuses, all played a role in the housing bubble that led to "Main Street" mortgage fraud (e.g. predatory lending, liar loans, appraisal fraud). Cracking down on such abuses can prevent people from losing their homes, by stemming the fuel for “Main Street” mortgage fraud such as predatory lending, phony appraisals and mortgage broker conflicts of interest.
According to a recent report, Donovan wants to shift the focus of the office away from Wall Street, calling for a policy of “caution” to make sure the industry does not “go anywhere.” Donovan further said, in regard to whether he would actively prosecute or investigate Wall Street, he does not want to “disturb the garden.”
In contrast to Donovan’s vow to shift the office’s focus away from Wall Street, Eric Schneiderman has proposed a comprehensive agenda to address the frauds that lead to foreclosures, and to protect people facing foreclosure from further harm by con-artists and financial predators.
Critically, the new federal financial reform law will result in a new federal Bureau of Consumer Financial Protection, which will be tasked with creating additional rules and enacting new consumer protections related to mortgages. These rules --if enforced -- will reign in many abusive (but currently legal) practices that contributed to the ongoing foreclosure crisis. Both federal and New York law makes it the duty of the Attorney General to enforce these new rules, and Eric Schneiderman has pledged to make it a priority to do so.
As Attorney General, Schneiderman will work to stop the cycle of fraud whereby fraud in the individual mortgage market fuels Wall Street securities fraud — and the other way around. His approach is holistic, with the twin and related goals of obtaining restitution for victims and instituting industry-wide reforms. He will build on Attorney General Cuomo’s groundbreaking work to address the fraud and abuse that played a major role in the 2008 financial collapse, and that — as today’s report shows — increasingly to threaten the homes and investments of hard working middle-class New Yorkers.