Too Big To Jail: Thousands Protest Around Nation Against “Settlement” Proposed by Obama and AG’s


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Protesters Demonstrating in Front of Foreclosure Fraud Settlement Meeting in Chicago

By: David Dayen,

Protesters have gathered outside a meeting taking place in Chicago today between officials with the Obama Administration and some state Attorneys General or members of their staff, aimed at reaching agreement on a low-ball settlement with leading banks over foreclosure fraud.  The proposed settlement would give homeowners a pittance in exchange for a broad release of liability from prosecution for the banks.

About eighty members of various community and faith groups in Illinois, including national groups like, National People’s Action and The New Bottom Line, have gathered outside the Chicago O’Hare Hilton Hotel. They are holding a press conference there and protesting the proposed settlement. Later in the day, the protesters plan to visit the local offices of Illinois AG Lisa Madigan, who is on the executive committee which negotiated the settlement, and the Obama for America 2012 campaign headquarters.

The protesters object to the low dollar value of the settlement, estimated at $20-$25 billion, when there is currently $700 billion worth of negative equity – money owed on mortgages less than the value of the home – in America. They also object to the fact that there has been no meaningful investigation into the depths of foreclosure fraud by the Department of Justice or any federal regulator. Further, they oppose a broad release of civil and/or criminal liability for the banks for their conduct at all levels of the housing market. [EDITOR’S NOTE: SOMEHOW THE $700 BILLION FIGURE HAS BEEN ACCEPTED. I did the math. The figure is ten times that at $7 trillion].

The proposed deal will get circulated to the banks today. Many of the holdout AG offices did not send a representative to the Chicago meeting. But they have the information on the settlement, and for a variety of reasons the events of the next 24 hours are seen as consequential. There are even rumors, according to Rep. Brad Miller (D-NC), of an announcement on the settlement appearing in tomorrow’s State of the Union Address. “They have not said anything to us on the State of the Union, but there’s a sense that they may do something,” added Sen. Sherrod Brown (D-OH), an opponent of the settlement on a conference call today.

Miller ticked off a number of unknowns surrounding the settlement. “What investigation has there actually been? What claims are being released?” Miller Asked. “Where did this $20 billion number come from for damages? What mortgages does this apply to? Does it apply to securitized mortgages that the banks don’t really own? Will they be able to pass on the losses for their own misconduct? Which homeowners get relief? If it’s just a dollar figure that the banks have to hit, will they pick the most expensive houses for relief and increase resentment against those who get the breaks in America?”

Brown, Miller and the coalition arguing for a “fair settlement” want a thorough investigation, with the inclusion of the Consumer Financial Protection Bureau (at this point not a part of this settlement). “It’s hard to know what a meaningful settlement would look like when we don’t have full disclosure,” Brown said. “Instead of a thorough investigation and criminal prosecutions, we’re talking about not much more than a slap on the wrist. The banks are not just too big to fail, they’re too big to jail.”

Justin Ruben of, a key coalition partner, cited new polling showing that found that 70% of Americans believe the banks have not been investigated enough on their foreclosure practices, and that 60% of those polls would be less likely to support the President for re-election if he gave the banks a sweetheart deal. By contrast, the President would gain support if he announced a real investigation into Wall Street’s practices. MoveOn has forwarded a petition asking for an investigation, and has acquired over 360,000 signatures.

18 Responses

  1. We are all led to understand that the principal theory of consumer bankruptcy in America is that it provides a “fresh start” to debtors, …as the United States Congress created title 11 (the Bankruptcy laws) to set forth certain rights to which citizens are legally entitled. When the administrator of the bankruptcy case fails to act or acts in bad faith, (for example supporting pretender lenders) resulting in an “invasion” of the Debtor’s rights under title 11, such failure is an injury in and of itself…however, now we have come to learn those banks are basically “too big for trial” as phrased by Senator Warren !!!

    Therefore it appears, that avenue of helping consumers and holding the banks accountable is not available.

    Alternatively, might a remedy be found under 42 USC 1983 for homeowners who find themselves under the jurisdiction of the bankruptcy courts?

    In that, the Office of the United States Trustee, a component of the United States Department of Justice being charged with oversight of the bankruptcy system, might well stand to answer for the lack of enforcement by the USDOJ. For example, in cases where a claim is filed and bankruptcy trustee “neglects” to oversee possible pretender lender type conduct by those “too big for trial” entities, the bankruptcy trustee might be more diligent when administering the claim process, thereby helping that individual homeowner and at the same time a remedy under 42 USC 1983.

  2. I wrote back to Moveon. and told them that Obama said his Attorney General will create a unit to expand investigations. Atty. General is Eric Holder who was with a big law firm that defended the big banks. Last week I wrote Obama’s office again and suggested they hire Bill Black for the investigations. Eric Holder has not done anything in 4 years and they want us to believe he is going to start now. Please.

    I saw Beau Biden, AG, on Dylan Ratigan today and his speech was awesome. He said the too big to fail banks simply don’t think we have the guts to get to the bottom of this and he will continue to get to the bottom of this. He wants to be on the task force and said AGs cannot make a settlement without investigations. He wants to know how many investigators, FBI agents and prosecutors there will be.

  3. @ ALL

    Another message in my mail….

    Dear MoveOn member,

    Did you watch the State of the Union tonight? President Obama did exactly what hundreds of thousands of us have been calling on him to do—he announced a federal investigation into Wall Street. Here’s what he said:

    “I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to 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 best part is, progressive champion New York Attorney General Eric Schneiderman is co-chairing the investigation and will make sure it stays on track.

    Just weeks ago, this investigation wasn’t even on the table, and the big banks were pushing for a broad settlement that would have made it impossible. Your work changed all that.

    This is truly a huge victory for the 99% movement.


  5. Occupy Davos build igloos –what is Davos?–a place in Switzerland where about 2600 world leaders and finance folks are meeting at the World Economic Forum. Hotel rooms run $500 so the OCCUPY folks are staying in their own built igloos.

  6. Is Schneiderman selling out? Did the White House get to him?

  7. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, Justin ruben, LOAN MODIFICATION, modification, moveon, National People’s Action, New Bonttom LIne, Obama, protests, quiet title, rescission, RESPA, securitization, sherrod brown, TILA audit, trustee, WEISBAND Livinglies’s Weblog […]

  8. Guess I’m really not the only one who got what happened yesterday and why…

    Write to your AGs and oppose adamantly any kind of settlement without prosecutions and for less than $300 billions. Write to Schneiderman and let him know that you know what’s going on and that this is another way of making sure that nothing is done to punish the banks.

    Not optimistic at all for this spring. Cutting Schneiderman’s wings will go a long way toward fueling protests, demonstrations and what not…

  9. Just remember a vote against Obama means that Tim Geithner is gone ASAP.

  10. @Carie,

    Did you hear Obama say so? No.

    It is NOT chaired by Schneiderman. It is simply co-chaired by him but chaired by Lanny Beuer, previously from the white-collar crime DEFENSE division of Covington and Burling.

    Skilled politicians keep dissenters close to them and under control. Obama did it with Hillary Clinton. He is doing it with Schneiderman. What better way than to cut his ability to do the work by teaming him up with someone from C & B?

    We’re on our own. Help will not come from him.


    EXCLUSIVE: Obama To Announce Mortgage Crisis Unit Chaired By New York Attorney General Schneiderman

    First Posted: 01/24/2012 8:06 pm Updated: 01/24/2012 9:59 pm

    “WASHINGTON — During his State of the Union address tonight, President Obama will announce the creation of a special unit to investigate misconduct and illegalities that contributed to both the financial collapse and the mortgage crisis.

    The office, part of a new Unit on Mortgage Origination and Securitization Abuses, will be chaired by Eric Schneiderman, the New York attorney general, according to a White House official.

    Schneiderman is an increasingly beloved figure among progressives for his criticism of a proposed settlement between the 50 state attorneys generals and the five largest banks. His presence atop this new special unit could give it immediate legitimacy among those who have criticized the president for being too hesitant in going after the banks and resolving the mortgage crisis. He will be in attendance at Tuesday night’s State of the Union address…”

  12. Mitt Romney’s State of the Union Challenge on the Mortgage Crisis

    Finally, a presidential candidate came out and honestly addressed the biggest problem in our economy, the enormous debt overhang in our mortgage market. A few days ago, Mitt Romney was at a forum in Florida talking about foreclosures, and his comments were actually refreshingly honest about our housing and banking situation and the need for a debt write-down.

    We’re just so overleveraged, so much debt in our society, and some of the institutions that hold it aren’t willing to write it off and say they made a mistake, they loaned too much, we’re overextended, write those down and start over. They keep on trying to harangue and pretend what they have on their books is still what it’s worth.
    Mitt Romney was pointing out that the banks are carrying debt on their books at inflated values. When was the last serious politician to make that point, openly? There’s more.

    In some cases, if the debt is not in something you can service, it’s like you have to move on and start over away from those debts. It’s helpful if you get an institution that’s willing to work with you, but if you don’t you have no other option.
    Romney is now saying that if you can’t pay your debts and your lending institution won’t work with you, walk away. Perhaps this isn’t so surprising, though, as Romney is an expert in debt restructuring. This is actually just common business sense.

    And finally, he offered a real solution to the mortgage debt crisis.

    The banks are scared to death, of course, because they think they’re going to go out of business… They’re afraid that if they write all these loans off, they’re going to go broke. And so they’re feeling the same thing you’re feeling. They just want to pretend all of this is going to get paid someday so they don’t have to write it off and potentially go out of business themselves.”

    This is cascading throughout our system and in some respects government is trying to just hold things in place, hoping things get better… My own view is you recognize the distress, you take the loss and let people reset. Let people start over again, let the banks start over again. Those that are prudent will be able to restart, those that aren’t will go out of business. This effort to try and exact the burden of their mistakes on homeowners and commercial property owners, I think, is a mistake.

    This is the right approach to the problem. If you force the banks to recognize losses on the mortgage debt they are holding, then all of a sudden they will have an incentive to write down debt. Otherwise, a bank will do anything it can to maintain the fiction that the debt is worth 100 cents on the dollar, including lie, harass, and robo-sign.

    There are ample reasons for cynicism, the cup overfloweth with them, perhaps. Still, what’s shocking about these comments is how casual they are, as if it’s common knowledge that the banking system is still insolvent and that our debt loan cannot be paid back. Among financial elites, it in fact is common knowledge. Tim Geithner noted this when he talked about Lehman Brothers and the “air in marks” on the debt it was holding on its books. And Martin Feldstein on the Republican side and Alan Blinder on the Democratic side are both arguing for debt write-downs. Everyone knows this has to happen, that the accounting manipulation needs to stop. But Mitt Romney actually said it.

    We’re pretty sure that Romney will walk these comments back if necessary, since he holds positions only insofar as they are convenient. Since at that same forum he called out for praise one of the most bank-friendly state officials in the country, Florida Attorney General Pam Bondi, we can probably measure his adherence to this common-sense approach in micro-seconds.

    But what this episode shows is that the solutions to our crisis are understood. In the book Greedy Bastards, the question of restructuring debt is considered in detail. We need a debt deal, as Romney inadvertently noted. More fundamentally, getting rid of the accounting gamesmanship will lead to a healthier economy because it will align financial assets with real economic assets. As another example, credit default swaps are linking American banks excessively to an unstable Eurozone. Credit default swaps are in fact yet another accounting game designed to further balance sheet fictions. Dick Grasso offered his solution to this obvious problem. We can, according to Grasso, simply declare these contracts online gaming, and void them.

    What Americans should be taking from this episode is that finance, while complex, is not conceptually hard. If it’s a lie on the balance sheet, it’s going to be destructive to ordinary people. If you stop the balance sheet lying, the economy will do better. But while Mitt Romney might have said this out loud, they all know it behind closed doors. Our question is, who will be the first to make this a policy reality?

  13. Opinion, use discernment

    For one, State and Federal are two different jurisdictions.
    Second, there is no way the State AGs can or will allow the Federal government to dictate the terms of their settlement, whether they make one or not.

    Although the people have been removed from the Constitution by being considered persons, the state has rights that predate the constitution and only the rights conferred to the Federal government by the states is the only rights the Federal Government can exercise.

    People don’t like Obama. I get it. If the sun don’t shine tomorrow, it’s is fault. I get it. They have short term memory. They have no idea how deep in debt we were, how the prior admin gave huge tax cuts to the rich, how the prior admin put us in wars and mission accomplished them one year later, but was stayed for 10 years. They don’t know who said for people to buy houses, and then said for people to go out and spend money when all those folks died in New York. They forget what this president inherited. This country still stands, and in my opinion, whoever controls the money has controlled everything that has happened. As soon as the president mentions something they don’t like, the rest of us will wake up when the ‘reaction’ is something that affects us. “O” didn’t put you on food stamps, he didn’t foreclose on your home, and he’s not responsible for how bad the jobs are (who reduced the money supply to the public after taking the bail out that was put into place before the man could take the oath of office)?

    I voted for him and don’t know what to make of his performance. I don’t feel we are any better than we were, but I sure as heck know we could be worse. From my vantage point, it seems he’s doing a good job holding on and keeping the money changers from driving this place into a third world nation. That’s my vantage point because I pay attention to more than the average Joe or Jane. I see more than they see because I know what to look at and I know when someone is lying.

    “O” was not part of any settlement between the AG and fraudsters.
    Congress passes laws, “O” signs them. “O” could write an executive order if he was going to force a settlement on the state and the people.

    IF you don’t like the settlement, don’t cash the check. That’s my opinion.
    Cashing the check means accepting the terms whether you know what they are and can read or not, you’d best have some comprehension of what it really, really means to ‘accept a settlement’.

    I’ve signed no contract for anyone to offer a settlement on my behalf. I did create a contract complaint of loss of right. I am one of the Free People who has rights before the Constitution was created. That document doesn’t dictate how I should be treated. My Creator provided me with all the rights I need, and I’m just trying to prevent a trespass.

    When one occurs, I take names and move on. Those names are in the spiritual book of life. We all have the Creator within, so the Creator in me knows what the Creator in you did. Period. Accept it or not, the truth doesn’t have to be defended. It just is. That’s why there is a judgment day and I only have to make sure that the trespassers know they are trespassing.

    The writers of the Constitution know about the Creator, and that’s why the document was based on that fact. The states existed before the Constitution was written. The states exist after the Constitution is written.

    There is a separation of Federal and State, each having their own Constitutions.

    States would not exist if there were no people. The people are free. The People are sovereign. The Creator, created people. Corporations would not exist if no man had created them. A corporation cannot rule the people, because a corporation is not greater than the Creator nor greater than the People. A person was created by man. A corporation and a person are equal.

    All are presumed to be persons. Citizens aren’t sovereign. Citizens are persons. There’s more to this world, but people want to fuss and point fingers and it’s our lack of knowledge that created this and our continued lack of knowledge that allows this to continue to occur.

    We think that just because a big group gets together they can change something, and those that want to remain in power will give you the smaller victories. The real victory comes when the group ‘knows’ and then makes the changes needed. Right now it’s a big group that don’t know and ‘accepts’ the changes given to them.

    A living man or woman, a CEO is ruling these negotiations. They decide what is acceptable or not for the settlement. Those attorneys are not on their own settling this disputed. They are representing someone, alive, corporeal. For a building that does not live to rule over life that does live, is an abomination of Natural Law. It’s like having a golden calf control your life, or some statue control your moves or your car telling you what you can and cannot do. It’s not natural.

    “O” is not responsible for this settlement. Anyone that says so, is either mistaken, misinformed, or has some other issue with accepting or knowing the truth.

    The reservation to the states respectively only means the reservation of the rights of sovereignty which they respectively possessed before the adoption of the Constitution of the United States, which they had not parted from by that instrument; any legislation by Congress beyond the limits of the power delegated would be trespassing upon the rights of the states or the people, and would not be the supreme law of the land, but null and void. Gordin v. U.S. 1864, 117 U.S. 697,76 L. Ed. 1347. See also Hockett v. State Liquor Licensing Board, 1915, 110 N.E. 485, 91 Ohio St. 176, L.R.A. 1917B, 7.

    Federal Union has only the powers expressly conferred on it and those reasonably implied from powers granted, while each state has all governmental powers except such as the people, by Constitution, have conferred on United States, denied to the state, or reserved to themselves. U.S. v. Butler, U.S.Mass1936, 56 S.Ct.312,297 U.S. 1. 80 L.Ed. 47,4 O.O 401.

    These were the rulings when ‘We the People’ existed. Now that it’s presumed a nation of persons, you won’t find a court that will honor these rulings, except to say corporations are People and have the same rights and People. If that’s their way of getting us back to the original Constitution, then so be it.

    I don’t have the comprehension to know what everything means, but I can sure spot distortions in things that are presented at true.

    Trespass Unwanted, corporeal, life, free, in jure proprio, jure divino

  14. Hey Anonymous. I am glad I agree with you on this one.


  15. Vote out Obama and vote in Democrat Senators and Congressmen. Have no other choice.

  16. That would be rich (pardon the pun) for this first family, wholesome in appearance as they are, in whom Americans vested with the mantel of Dr. Martin Luther King, to be defeated by the election of the womanizing, immoral, ‘on the take,’ disrespectful Newt Gingrich. American Dream, or American Nightmare? Who has allowed them to turn THIS Nation into one in which Up is Down?

    Come on Obama! Pull the trigger. Make the move. We know you know what you have to do to fulfill the promise. Make your name not as the Banksters’ President, but as the Peoples’ President.

  17. oops probably get elected.

  18. A vote for Obama is a vote for a bankster.

    Even if you think the other guy is just the same. It will at least send a message. NEWT Gingrich understands this and will probably get re-elected.


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