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Eric Schneiderman to Lead Obama's New Mortgage Abuse Unit

By Jill Colvin | January 25, 2012 6:30am
State Attorney General Eric Schneiderman.
State Attorney General Eric Schneiderman.
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New York State Attorney General's Office

MANHATTAN — State Attorney General Eric Schneiderman will head a new special unit charged with investigating shady mortgage practices that President Barack Obama announced during his State of the Union address Tuesday night.

Schneiderman, who was in the audience during the speech and had prime seating in the First Lady's box, will co-chair what the president described as “a special unit of federal prosecutors and leading state attorney generals” that will “expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis.”

“This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans,” the president said.

Schneiderman, who has pushed to hold the banking industry to task, had previously butted heads with the administration over a proposed settlement deal with banks over questionable foreclosure practices. The first-term AG was even booted from the negotiating committee because of his punitive stance.

But the dispute seems to have paid off for Schneiderman, who is now set to co-chair the new Unit on Mortgage Origination and Securitization Abuses, along with the Assistant Attorney General for the Criminal Division, Lanny Breuer, and other SEC and DOJ officials, according to the Huffington Post, which first broke news of the new unit just before the speech.  

The former State Senator from the Upper West Side thanked the president in a statement released mid-way through the address for moving “to bring justice for the victims of the misconduct that caused the mortgage crisis.”

"The American people deserve a robust and comprehensive investigation into the global financial meltdown to ensure nothing like it ever happens again, and today's announcement is a major step in the right direction,” he said.

He later tweeted, “We will continue our steadfast commitment to hold those responsible for the economic crisis accountable/bring justice for homeowners #SOTU.”

Public Advocate Bill de Blasio also praised the appointment, hailing Schneiderman’s past work.

“Tonight, predatory lenders were put on notice when @AGSchneiderman was named to lead investigation into mortgage crisis,” he tweeted.

“Eric’s deeply held values and unabashed dedication to giving people a voice and the strength to stand up to powerful interests are what set him apart,” he added in a statement. 

“Struggling homeowners can find peace of mind knowing Eric Schneiderman is on the case and fighting for them.”