Q&A with Elizabeth Warren: 'The changes are starting now'-“My Money is on the AG investigation”

[kpete]

Q&A with Elizabeth Warren: 'The changes are starting now'
The Harvard professor appointed to set up the Consumer Financial Protection Bureau says the new agency is already making a difference.
October 26, 2010|By Jim Puzzanghera, Los Angeles Times

Reporting from Washington — On the fifth floor of an office building near the White House, consumer advocate Elizabeth Warren has begun shaping the centerpiece of the recently enacted Wall Street reform law — the Consumer Financial Protection Bureau.

Both Warren and the new agency are controversial.

Do you support a nationwide foreclosure moratorium?

Right now my money is on the attorneys general (who have launched a joint investigation in all 50 states). Foreclosure rules differ from state to state, and they are in the best position to determine who has and who has not followed the law.

Do you think some consumers might be surprised that you are not advocating a broader pause on foreclosures while bank paperwork problems are being worked out?

This agency will not veer from its support of American families, whether it’s in the foreclosure crisis or elsewhere. But no one would want this agency … to act before it had collected all of the necessary data and thought through the options. The attorneys general are moving fast, and at this moment, I think that’s the right response …with emphasis on “at this moment.”

http://articles.latimes.com/2010/oct/26/business/la-fi-elizabeth-warren-20101027
http://news.firedoglake.com/2010/10/27/warren-my-money-is-on-the-ag-investigation-in-foreclosure-fraud-mess/

[EFerrari]

1. Foreclosure laws differ from state to state but the Feds have jurisdiction

over the national banks.

A moratorium while the rampant FRAUD is investigated wouldn't have to reconcile the laws of 50 states. It would simply be a moratorium.

[MineralMan]

2. I don't think it's that simple, actually, even though I would like it

to be. Every foreclosure happens in a court in a county in a state. I'm not sure there's a viable mechanism for the federal government to simple impose a moratorium on foreclosures. They might be able to stop foreclosure proceedings for lenders who are under federal regulation under the interstate commerce clause, but lots and lots of mortgages are still held by local banking institutions, credit unions, and the like, which are completely within a single state.

Property issues really are one of the areas that are the state's issues. Difficult legal stuff all around this thing. Some caution on the federal level is warranted, to prevent the efforts from being thrown out in the first district court to hear the case.

[EFerrari]

3. Yes, there is a simple way. They impose the moratorium on the banks

in their jurisdiction.

[MineralMan]

4. Yes, they could do that, as I agreed. However banks in federal

jurisdiction are far from the only putative note holders out there. There are many others, and they wouldn't be subject to that moratorium. That's the issue I was raising in my post.

[EFerrari]

5. If the Feds called the moratorium, the big banks would have to suspend

and then the state attorneys general could deal with the smaller entities in the states. When Warren cites the AGs, she's doing that with the full knowledge that they can't mount a moratorium on their own.

/typo

[Recursion]

6. Or, the Feds would be litigating for the next 7 years

Especially since a lot of states would sign on on the banks' side to preserve their own jurisdiction.

[EFerrari]

7. And we can't have the Feds litigating for the next seven years, right?

Just because these foreclosures are actually a program of predatory loan servicing, we can't actually ask the Federal government to do its oversight job and step in.

[Kurovski]

8. It's so nice to see how reasonable you've become.

See how the nice people's arguments are so reasonable? Let's all just be reasonable, shall we? I certainly want everyone to think I'm reasonable, now don't you my dear? That would be a reasonable thing to think. Let's do be reasonable, as not being reasonable can be...distressing. So, I'm glad to see all this reasonableness in play. That's settled then. Good.

[EFerrari]

9. If we get any more reasonable, I might have to dust off these bridges for sale.

:)

[Kurovski]

10. Now 'yer talkin'.

Make money off misery and scams. It's the one true form of right-wing reasonableness. :D

[girl gone mad]

13. Hmm.. Nobel Prize winning economist Joseph Stiglitz says you're wrong.

AMY GOODMAN: Would you support a foreclosure moratorium?

JOSEPH STIGLITZ: Well, I think probably the answer is yes. The fact is that they’ve generated so many bad mortgages, so many fraudulent mortgages. And by the way, this problem of fraud has been known for a long time. The FBI started reporting on this years ago. I talk about that problem in my book. It’s not just risky lending. It was fraudulent, predatory, all these—and so, we have a backlog now. And we shouldn’t be surprised that our legal system is not capable of processing the numbers of foreclosures that have to be processed. We’re talking about probably something in the order of magnitude of three million, three-and-a-half million foreclosures actions this year. Last year, the estimate was about two million lost their home; the year before, two million. Our system isn’t geared to do that.

But there’s a more—there’s a deeper point that I’d like to raise, which is the following. You know, in a democracy like ours, people have to have confidence in the fairness of our legal system. And if they feel that the legal system is stacked against them, then voluntary compliance—our whole social fabric starts fraying. And I think a lot of Americans have come to the view that the system is stacked against them. It began, in a way, with the bankruptcy law that was passed back in 2005 that, in effect, reintroduced bondage in America. I mean, people haven’t realized how bad that law was. If you owe a hundred percent—you know, amount of money that’s equal to a hundred percent of your income—you have a $40,000 income, you wound up with a credit card debt and other debt of $40,000—for the rest of your life you may be working 25 percent of your time for the banks. The way it works is very simple. They can take 25 percent of your income—you know, it used to be easy that you could go bankruptcy and you get discharged of the debt. They made it very difficult. So, you can pay 25 percent of your income every year to the bank, but then the bank can charge you 30 percent interest. So, the end of the year, you owe more money than you did at the beginning of the year, even though you gave 25 percent of your income to the bank. Now, this is an example of something that is clearly socially unjust.

http://www.democracynow.org/2010/10/20/nobel_laureate_joseph_stiglitz_on_how

Yeah, I'm going to side with the single most respected economist on the planet on this one.

[mkultra]

11. these banks are not national

They are all based in some state and are all subject to whatever foreclosure laws exist in the state in which they are operating.

she is right on the money as usual.

[EFerrari]

12. As my state attorney general's office told me,

the Feds have jurisdiction over the national banks. If you want to file a complaint, you need to go to the US Comptroller.

[mkultra]

15. which national bank are you refering too?

i mean, if you are referring to a federal reserve bank, then yes. Otherwise, its state based.

[Kurovski]

14. Kick. (nt)