If you were following the mortgage settlement negotiations, it was very clear than the decision of New York state attorney general Eric Schneiderman to abandon his role as the de facto leader of the opponents of the agreement, join a Federal task force to investigate mortgage abuses, and go silent on where he stood on the negotiations put the dissenters in disarray and enabled the Administration to push the deal over the line.
While this blog has repeatedly pointed out that Tom Miller, the Iowa attorney general and leader of attorneys general in the settlement negotiations, is not the most credible source, the flip side is that the description of the release in the Administration’s own
propaganda website strongly suggests that the release of bank liability is broad, rather than narrow, as deal cheerleaders claimed.
If you take this section of an article at Politico, “HUD boss jumps into mortgage melee,” (hat tip reader Deontos) at face value, you can only draw damning conclusions about New York attorney general Eric Schneiderman’s role:
Schneiderman, whose Lower Manhattan office overlooks Zuccotti Park where the Occupy movement began, felt like he was being strong-armed by Donovan and wasn’t shy about sharing his dissatisfaction. In late August, The New York Times reported that Schneiderman had come “under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices.”
That did it for [HUD Secretary Shuan] Donovan, according to people close to him. Worried that the settlement was in danger of falling apart, he woke up at 5 a.m. the next morning and sketched the outline of what would emerge as the final compromise plan.
A bit later he called Schneiderman, who immediately began re-arguing his case for holding banks accountable.
Donovan stopped him: “Look, hear me out, I want to get past this,” he said, and proposed creating a special panel to probe wrongdoing by banks, to be co-chaired by Schneiderman. He also promised to limit the scope of any releases granted to the banks and rewrote his draft.
Miller, who clashed with Schneiderman over the releases, said Donovan didn’t make many changes but was artful enough to sell it as a compromise to the New York attorney general, who wanted to seal the deal.
“Essentially what Shaun did was let Eric take credit for shaping the release,” Miller said, “credit that wasn’t factually correct.”