How Foreclosures Are Impacting Election Prospects

First, let’s clear out one thing: neither Romney nor Obama caused the wave of millions of foreclosures. In fact, while the Republicans are guilty of obstructionism in Congress and across the country, the most you could say about Republicans is that they didn’t do enough to stop the foreclosures. The same is true for a portion of Democrats. Wall Street created a scheme where the only possible ending was an enormous wave of fraudulent foreclosures.

Second as to the positions of the two presidential candidates, neither one has any bragging rights.

Romney in true Republican style said let the housing market “bottom out “— the market will take care of itself. That’s like saying to guests on a sinking ship, we’ll wait until after it sinks and then the natural action of the currents will bring your bodies up for recovery.

Romney was dead wrong on that, doesn’t understand the importance of housing in the economy and is completely out of touch with the idea that government is “of the people, by the people and FOR the people.” He said the same thing about the car industry and was dead wrong on that, so we shouldn’t expect any help from a Romney administration when it comes to housing, and therefore we shouldn’t expect anything more than a sluggish economy during his tenure, if he has one.

Obama has made some baby steps in the right direction but did not understand and perhaps still does not understand the scope of the crimes committed on Wall Street and is still acting as though the fall of the mega bank empires will have devastating results to our economy. Quite the contrary is true. And his estimates of how many homes he saved is about 10 times thee actual number.

As long as Obama listens to Wall Street about what to do about Wall Street crimes his policies are held prisoner to the people who ought to be in prison. And the criticism of his aloofness in dealing with Congress is justified. Not that Romney would be any better after more than 800 vetoes in Massachusetts as Governor.

So this isn’t about who SHOULD be president or who SHOULD control congress, it is about who WILL be president and who WILL control Congress.

The metrics are unavoidably simple and direct. Millions of people have been ejected from their homes. That is a fact. There are more than 10 million registered voters who were ejected from their homes. Why neither candidate has courted these people as voters is beyond comprehension. But the fact is that without registering to vote in their new places of abode, they won’t be voting in this year’s election.

The overwhelming majority of homeowners who were illegally foreclosed and ejected from their homes were from so-called minority groups. They included single mothers, some of whom were married to men fighting overseas — a foreclosure that is specifically prohibited under law, but that didn’t stop the banks from carrying out their illegal and fraudulent claims of securitization, assignment and keeping the huge profits from recurring resales of the same mortgages to multiple counter-parties.

In this group of foreclosures composed of “minority” or specially described voters, the overwhelming majority of them would vote for the President and Democrats running in their districts. But many of them won’t vote because of various reasons that either prohibited or interfered with their registration to vote — like desperate trying to find a job.

I cannot put an exact metric on it because all I have is anecdotal evidence. But from ALL ends of the political spectrum, it is clear that a high percentage of evicted homeowners will not vote this November. That could easily swing the election one way or the other. With more than 10 million disenfranchised voters (or some portion thereof), the deal is stacked for Romney and the Republicans.

 

Politics Diverting Us From the Real Issues

“The bottom line is that conservatives don’t conserve anything. They have their hand deeper into the public purse than anyone else. Liberals don’t liberate anyone either, providing the tools to prospects for progress and prosperity. The terms should not be used because nobody means what they say.” Neil F Garfield livinglies.me

Editor’s Comment: Romney’s latest gaffe is only a mistake in terms of him having said it, not that that he didn’t mean it. To set the record straight the 47% pay payroll taxes that the rich don’t pay, have incomes under $50,000 per year, and one third of them are seniors and disabled with incomes lower than $20,000 per year getting Social Security and similar benefits that they paid for when they were working. But isn’t really the problem.

The problem is that what Romney gave voice to was a feeling amongst the elite Democrats and Republicans who look at the bottom economic half of the country with disdain. Although they are working, paying Social Security and Unemployment taxes most of these people are treated as though they are trash to be taken out and cleaned somehow. Those taxes amount to over 12% of their income whereas the income from wealth, escape those taxes altogether.

And THAT is the reason it is so easy for banks to manipulate politicians, law enforcement and regulators into doing nothing about the cancer growing on our society — fake mortgages, fake foreclosures, fake evictions, and fake income and assets reported for the banks. Some of the media are picking up on the fact that the stolen money from investors is not being recognized as taxable income, which it is, and that the IRS isn’t pursuing hundreds of billions of income taxes that are due from the Banks. Talk about getting a free ride.

Today’s conference call (7 PM EDT) with members will touch on this along with the usual report on what is getting traction and what tactics and strategies might be used to confront the banks who are faking ownership of the loans when they neither loaned the money nor purchased the loan with money.

My take on the political landscape is this: I speak with people from the so-called far right political spectrum to the far left political spectrum. I speak to members of fringe groups too.

The overwhelming consensus amongst all of them from one end to the other is that government is corrupt, banks are corrupt and that our society is in the wrong hands mostly without candidates who will speak to these issues. We need a new crop of politicians who are no so encumbered with loyalties to the bank oligopoly because at some time, the ticking time bomb is going to blow. I speak of economic meltdown, caused by fabricated transactions and assets that our counted as part of our national wealth and GDP.

If you ask people specific questions about what is fair, just, moral, ethical and legal nearly all of them respond with the same answers. So why are we a divided nation? Why to we listen to sound bites instead of forcing the candidates to speak to us about our issues, about our stress and anxiety — whether we will have a roof over our heads, whether we will have food on the table, whether our children will be educated well enough so that they can fill the jobs that are ready to be filled. Right now there are 3 million such jobs.

You would think that someone would want to do something about it. Obama tried to put through a bill to do something about that but he didn’t push hard enough. Republicans scoffed at it because of their allegiance to the super rich whose boatloads of money are floating nearly all the republicans and many of the democrats in local, state and Federal elections.

But we can’t blame one or even a group of politicians if we, the Boss, as the voters who control who governs us, don’t do our job and get educated about issues, educated about candidates and exercise our absolute right to vote in the elections.

The current crop of incumbents doesn’t worry about our reaction because we don’t have any reaction tot heir stupid policies, bills and laws. We are a nation of apathy where vote turnout has been going lower and lower. The reason is the same as the unemployment situation. The figures would be worse if we added those back who simply gave up. Don’t give up your vote. Use it and mean it!

WHO BENEFITS FROM AUSTERITY? WALL STREET!

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Editor’s Comment:

You might wonder why people, mostly republicans, are all about “spending cuts.” just for clarification here, spending cuts are what Europe calls “austerity measures.” every policy possibility has been played here and the worst one is clearly austerity or “spending cuts.” everyone calling for austerity is controlled by the banks. Everyone who is not controlled by the banks thinks it isn’t a bad idea to continue government safety nets and sponsor more commerce. Once upon a time Wall Street made its money riding the crest of successful economies, collecting brokerage fees for more and more deals. Not anymore. The Banks are intent on taking the capital — all of it. What then?

People think it makes sense to spend less money to have more. But when the government does that it has less, not more money, thus cutting off vital services. So you might want to think about who benefits as all the major industrialised nations go down the tubes. We know government loses, we know the people lose their services and pay more taxes, so who is it that benefits from the austerity spin?

WALL STREET is the answer. With the level of commerce declining, plummeting they can bet on a sure thing — that interest rates are going to go through the roof, which means that the prices of bonds already issued are going to fall like stones. Only on Wall street can you make bets on interest rates and bets on bonds or groups of bonds or banks or groups of banks. They are pushing the austerity engine and taking us all into a ditch while Wall Street rakes in whatever money is left in our limping economy.

Wall Street has not only turned the lending models on their heads they have succeeded at turning the policy models on their head. The results are unthinkable— Wall Street has created an incentive to kill commerce. And now they are so deep into those bets that the only game in town is putting every economy into crisis. Someone needs to pull the rug out from under these banksters and put them jail where they belong. As society gave them the license to create and grow liquidity for the engine of economic growth so too can society take it away when the banks bite the hands that fed them.

Paul Krugman Debunks Mitt Romney’s Economic Nonsense

By: Jason Easley

On CNN, Paul Krugman called out Mitt Romney today for spouting nonsense about the economy and explained why Romney’s plan to do what Greece did won’t bring prosperity to America.

Here are Krugman’s thoughts on Obama and Romney via CNN:

ZAKARIA: All this said and done, are you enthusiastic about President Obama? You were not for him in the Democratic primary four years ago.

KRUGMAN: Right. I mean, we’re a long way past where I think enthusiasm is the appropriate emotion for anything here.

But he’s learned a lot. And, you know, his heart’s always been in the right place, and I believe his head is now in the right place. And you certainly — of course, I can’t do endorsements, right? It’s a Times rule. So you have no idea who I prefer in this election.

(LAUGHTER)

But he certainly is talking sense about the economy, and Mitt Romney is talking utter nonsense. And you really do worry. In effect…

ZAKARIA: What is the single biggest piece of nonsense that Mitt Romney…

KRUGMAN: Mitt Romney is saying basically that spending cuts are how we’re going to get to prosperity. Mitt Romney is saying, see what’s happening in Greece and in Portugal and in Spain and in Ireland; let’s do that here.

Boy — you know, we’ve just had a massive test, human experimentation on a massive scale, in effect, alternative doctrines of economic management. We’ve just seen which doctrines are disastrous. And the Republican platform is, let’s put that doctrine that has just caused collapse in Europe — let’s put that doctrine into effect right here in America.

Krugman was right on the money. Republicans have been trying to play what they think is a clever game of pretending that what they have proposed isn’t austerity, while at the same time threatening to implement austerity if they don’t get what they want, which is austerity. History shows that economies suffocate under austerity, but Republicans like Mitt Romney and Paul Ryan keep pushing the insane idea is that we can do the same thing that Europe did, but expect a different result.

Republicans are using austerity as an economic justification for their policy of feeding the rich while starving everyone else. The Romney and Ryan plans by design don’t force any austerity measures on the wealthy. The austerity is designed for everyone else. The rich would benefit while America’s devolution into a society of haves and have nots would accelerate. The reality is that Spending cuts never bring prosperity, and many of the rank and file Republicans who are championing the cuts fail to understand that those cuts will be coming out of their hides. All of the Republicans over 65 years of age who support Romney haven’t put the pieces together that a vote for Mitt is a vote to slash their Medicare.

Mitt Romney is spewing contradictory economic nonsense, because the Republican platform is becoming little more than historically discredited feel good dreams of trickledown worship and gibberish.

Paul Krugman is right. A majority of his fellow economists know he is right. The American people know he is right, and history proves him correct, but the Republican Party is trapped in a suicidal fantasy economy of their own creation. It is this fantasy that Romney has to pander to in order to keep his base, and it is the same fantasy that Paul Krugman absolutely destroyed.

GOVERNMENT OFFICIALS NEGOTIATING (SELL-OUT!) WITH BANKS AND TAKING POLITICAL CONTRIBUTIONS SIMULTANEOUSLY

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EDITOR’S COMMENT: WHAT ARE THEY NEGOTIATING ABOUT AND WITH WHOM ARE THEY NEGOTIATING? This is theater in the most absurd. Our government is negotiating with the very people who have demonstrated that they must fabricate and forge documents in order to establish their authority to do anything. Even in hostage negotiations we don’t give as much as we are giving to the servicers. They have no authority.

By definition they don’t own the obligation which means the obligation of the borrower is not owed to them. They are not the authorized agent of the real owner of the obligation until the real owner is identified and says they give authority to the agent to negotiate on their behalf.

Those documents don’t exist because those facts don’t exist. The investors are not going to give the servicers anything. If they were going to do that it would have happened en masse and avoided lots of paperwork problems for the banks. If it were not for political contributions, thousands of people would be headed for jail cells.

Instead we are negotiating away the future of America — for what? All homeowners are affected by these negotiations because when the so called honest Joe Homeowner goes to sell his home he is going to be hopping mad that not only can’t he deliver marketable title, he now has nobody to sue because the government sold him out. AND he still can’t sell his house because there is no way to clear up title.

These negotiations are a farce because down the road, they will be meaningless except that they will have added time to the already corrupted title registries across the country.

Mortgage servicers spend millions on political contributions

Banks under scrutiny as housing crisis festers

Posted Aug 8, 2011, 2:55 pm

Michael Hudson & Aaron Mehta Center for Public Integrity

As the financial markets roil, one of the critical factors weighing down the U.S. economy is the flood of home foreclosures. Thursday’s crash underscores how difficult it will be for the economy to make significant strides while the housing market is still in tatters.

The pace of the housing market recovery may depend in part on the outcome of intense negotiations underway among state and federal authorities and the nation’s five largest mortgage servicers.

Government officials are negotiating with the firms — Bank of America, JP Morgan Chase & Co., Citigroup, Wells Fargo & Co. and Ally Financial Inc. — over allegations of widespread abuses in the foreclosure process. State attorneys general around the country have been investigating evidence that the big banks used falsified documentation to process foreclosures.

Four of the five companies under scrutiny—Bank of America, JP Morgan, Wells Fargo and Citigroup — are major donors for state and federal political campaigns. Between them, they have donated at least $8 million since the start of 2009 to candidates, party committees and other political action committees, according to an iWatch News analysis of campaign finance data.

(Ally Financial hasn’t given money during that period to campaigns under its current name or is previous name, General Motors Acceptance Corp., or GMAC).

The fate of foreclosure negotiations could go a long way toward determining where the housing market will go in the next few years.

Normally, the housing market plays a leading role in any economic recovery. But that hasn’t been the case in the aftermath of the U.S. financial crisis of 2008.

“It’s has been a negative factor in this recovery — or lack of recovery,” housing economist and consultant Michael Carliner said.

Generally, when interest rates go down, that spurs the mortgage and housing markets and helps move the economy in the right direction. But that hasn’t happened this time around, said Carliner, a former economist for the National Association of Home Builders. “We have lowest mortgage rates since the early 1950s and it’s not doing anything,” he said.

Interest rates on 30-year fixed rate mortgages averaged 4.39 percent for the week ending Aug. 4, according to a survey by mortgage giant Freddie Mac.

What’s holding back the housing market, Carliner said, is a glut of available homes for sale, due in part to overbuilding during the housing boom and to continuing foreclosure woes. An “excess inventory” of perhaps 2 million homes is making it hard for the housing market to get going again, he said.

The inventory of foreclosures continues to grow. In June, one out of every 583 housing units in the United States received a foreclosure notice, according to data provider Realty Trac. The numbers are even worse in the hardest hit markets, where housing prices climbed the fastest during the housing boom and fell the most when the housing crash came. In Nevada, one out of every 114 housing units was the subject of a foreclosure filing in June.

Investigations and negotiations over allegations of fraudulent foreclosure practices by big banks have helped slow down the foreclosure process, making it harder for the market to work through defaults and readjust, Carliner said.

He would like to see a deal between government officials and mortgage servicers that would pave the way to swifter foreclosures that would help put the foreclosure problem in the past. “If people haven’t paid their mortgages in two years, they shouldn’t be able to keep their house,” Carliner said.

Not everyone agrees.

Ira Rheingold, executive director of the National Association of Consumer Advocates, a consumer attorneys group, argues that any national settlement should be about keeping people in their homes. He wants a settlement that would require banks to reduce the amount of mortgage debt held by distressed homeowners.

Reducing their payments and overall debts would help keep them in their homes and reduce the number of foreclosures, he said. It would also provide a measure of justice, he said, for homeowners who were defrauded via bait-and-switch salesmanship, falsified documentation and other predatory tactics that were common during the mortgage frenzy of the past decade.

Rheingold acknowledges, though, that extracting large concessions from big banks will be a “tough slog.”

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The banks have high-powered legal talent and lobbyists on their side, and four of the top five mortgage services have given generously to state and federal political campaigns, according to an iWatch News analysis of election data provided by the subscription-only CQMoneyLine. 

  • Since the start of 2009, Bank of America has donated at least $3.2 million to candidates, party committees and other PACs. Among the top recipients was Rep. Jeb Hensarling (at least $17,500), a Texas Republican who is vice chairman of the House Financial Services Committee. Another Texan Republican, Randy Neugebauer , received at least $16,000 from the financial giant. Neugebauer also serves on the Financial Services Committee, and chairs the Subcommittee on Oversight and Investigations.
  • JPMorgan Chase has donated over $ 2.8 million to candidates, party committees and other PACs since the start of 2009. The firm has made donations to the Republican Governors Association (at least $50,000), the National Republican Senatorial Committee (at least $45,000) and the National Republican Congressional Committee (at least $45,000), the Democratic Governors Association (at least $25,000) and the Democratic Senatorial Campaign Committee (at least $15,000). The firm also donated at least $15,000 to the Blue Dog PAC, the fundraising arm of the Blue Dog Democrats who were vital to financial corporations when the Democrats controlled the House.
  • and ranking member on the financial services committee’s Subcommittee on Financial Institutions and Consumer Credit.
  • Wells Fargo gave over $1 million to candidates, party committees and other PACs since the start of 2009. Wells Fargo has given at least $45,000 each to the NRCC and NRSC and at least $30,000 each to the DSCC and DCCC. It also donated at least $17,000 to Rep. Ed Royce , a California Republican who serves on the Financial Services committee. Another top recipient was Democrat Carolyn Maloney of New York, the vice chair of the Joint Economic Committee
  • Citigroup has given $850,000 to candidates, party committees and other PACs since the start of 2009. Among its top individual recipients is Democrat Gregory Meeks of New York. Meeks, who sits on the House Committee on Financial Services, has received at least $10,000 from Citi. Another is Ohio Republican Rep. Pat Tiberi (at least $15,000), a member of the powerful Ways and Means committee. Tiberi is currently the Chairman of the Subcommittee on Select Revenue, which has jurisdiction over federal tax policy.

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More by Michael Hudson

WHY ELIZABETH WARREN SCARES THE CRAP OUT OF BANKS

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“If there had been a cop on the beat to hold mortgage servicers accountable a half dozen years ago,” she said at one point, “the problems in mortgage servicing would have been found early and fixed while they were still small, long before they became a national scandal.”

EDITORIAL COMMENT: It’s a simple answer really. She is real and they are not. She wants us to  have the truth, they want us to fight with each other over ideology while the truth sails away.

With Barofsky leaving the TARP watchdog, and the only meaningful prosecutions Warren is the only person left in the administration whose intent conforms with the job of a public servant protecting consumers from wholesale fraud by the banking industry. Now they are after her with a vengeance to extinguish the risk of action by the administration that puts away people who should be convicted felons, and the risk that restitution to the government, taxpayers, homeowners and investors will be seriously pursued.

Whereas Barofsky’s eye was on past transgressions and unraveling the mystery of the TARP money, Warren’s eye is more on the future to stop the banks from using business models that uses consumers as targets. We have a very unbalanced situation that seems likely to get worse unless Warren is successful.

The failure of Congress and thus the Justice department to include banking in the scope of industries where monopolies must be regulated and controlled has left the industry in charge of itself and controlling what little is left of government regulation. In any other situation the justice department would have a clear path to antitrust remedies. It’s like water, electric and phone service — if we are going to give companies monopolistic share of the marketplace and raise barriers to entry for competition, then they should be regulated like utilities or broken up into much smaller companies.

If water companies were allowed the freedom of the banks, we would be paying $100 per gallon. That is what we are doing in finance, but nobody wants to see it that way except a few people who are accused over being alarmist.

It strikes me as hypocritical for the anti-regulators to say that big government is unwieldy and can’t be managed properly and then allow the creation of a financial industry that in every real metric is bigger than government and even more unmanageable — and not possible to regulate. We’re getting the worst case scenario every way we turn. We’ve already tried deregulating the financial industry and except for top members of the industry itself, NOBODY IS BETTER OFF. Quite the contrary, debt, which is the life blood of the financial industry, is draining the life force out of economy.

Whenever it is that we push the reset  button to clear title and stabilize commercial transactions, it better include a practical view of the financial industry. It should be serving the needs of the country and the marketplace. Instead we have them dictating what the economy and the country will get.

Elizabeth Warren has an uphill battle without much support from anywhere that counts. SO she needs YOUR support by writing to her and your congressman and state legislators about the inequalities in our economy that have stretched us past the breaking point. The goal is to have a healthy and productive society and a fair marketplace governed by democratic principles. The current status quo, for which the banks have dug in their heels to maintain, is anti-capitalism, anti-free market, and anti American.

Capitalism is an economic system that is midway between fascism (controlled by business) and socialism (everyone gets a share of the pie). The American dream is what drives capitalism — where we know there will be inequalities and excesses and we are willing to tolerate that because that is how opportunity and innovation flourish creating better circumstances for each generation of Americans. Using the unfounded fear of socialism, big business has taken us over the line to fascism in the marketplace and the society. we are a nation in which the government does not respond, much less fear, the reaction of the people because they are so easily manipulated by sound bites that scare them. Elizabeth Warren is practical and firm in her drive to return us to true capitalism, in which trickery is not protected by a system where predators run the government.

We need to return the favor and give her support every way we can.


An Advocate Who Scares Republicans

By JOE NOCERA

The piñata sat alone at the witness table, facing the members of the House subcommittee on financial institutions and consumer credit.

The Wednesday morning hearing was titled “Oversight of the Consumer Financial Protection Bureau.” The only witness was the piñata, otherwise known as Elizabeth Warren, the Harvard law professor hired last year by President Obama to get the new bureau — the only new agency created by the Dodd-Frank financial reform law — up and running. She may or may not be nominated by the president to serve as its first director when it goes live in July, but in the here and now she’s clearly running the joint.

And thus the real purpose of the hearing: to allow the Republicans who now run the House to box Ms. Warren about the ears. The big banks loathe Ms. Warren, who has made a career out of pointing out all the ways they gouge financial consumers — and whose primary goal is to make such gouging more difficult. So, naturally, the Republicans loathe her too. That she might someday run this bureau terrifies the banks. So, naturally, it terrifies the Republicans.

The banks and their Congressional allies have another, more recent gripe. Rather than waiting until July to start helping financial consumers, Ms. Warren has been trying to help them now. Can you believe the nerve of that woman?

At the request of the states’ attorneys general, all 50 of whom have banded together to investigate the mortgage servicing industry in the wake of the foreclosure crisis, she has fed them ideas that have become part of a settlement proposal they are putting together. Recently, a 27-page outline of the settlement terms was given to banks — terms that included basic rules about how mortgage servicers must treat defaulting homeowners, as well as a requirement that banks look to modify mortgages before they begin foreclosure proceedings. The modifications would be paid for with $20 billion or so in penalties that would be levied on the big banks.

Naturally, the banks hate these ideas, too. So the Republican members of the subcommittee had another purpose as well: to use the hearing to serve as a rear-guard action against the proposed settlement.

“Under what statutory authority are you currently acting?” demanded Representative Patrick McHenry, a Republican from North Carolina, questioning the legitimacy of her role in setting up the consumer bureau. He also questioned whether the government had the right to impose a $20 billion penalty on the banks — and then use that money for (heaven forbid) mortgage modifications.

Spencer Bachus, Republican of Alabama, the new chairman of the Financial Services Committee, wanted to know how closely Ms. Warren had been consulting with the White House and Treasury Secretary Timothy Geithner about naming a director for the bureau — and whether she would accept a recess appointment “knowing the type of blowback from that.” (A recess appointment is a temporary appointment the president can make when the Senate is in recess, thus avoiding the need for Senate confirmation.)

Representative Steve Pearce, Republican of New Mexico, said that he fully expected the Consumer Financial Protection Bureau to be no better than “the S.E.C. and Mr. Madoff.” “Within two years,” he added, “your agency is going to be operating exactly the same, that it’s simply out there grinding wheels away.”

Representative Scott Garrett, Republican of New Jersey, zeroed in on the proposed settlement. Where in the statute did she have the authority to consort with the attorneys general? he demanded to know. “Are you making recommendations to government regulators about the dollar amount?” he badgered. “Is that part of your role, to make recommendations about dollar amounts?”

On and on it went, until the hearing sputtered to a close, two and a half hours after the browbeating had begun.

To listen to the House Republicans, you’d think the financial crisis of 2008 was like that infamous season of the long-running soap opera “Dallas,” the one that turned out to be a season-long dream. Subprime mortgages? Too-big-to-fail banks? Unregulated derivatives? No problem! With the exception of their bête noire, Fannie Mae and Freddie Mac, the Republicans act as if nothing needs to be done to prevent another crisis. Indeed, they act as if the crisis never happened.

The home page on the House Financial Services Committee’s Web site has been turned into a screed against Dodd-Frank. Clearly, the committee is going to spend this session trying to minimize the effect of the legislation, starving agencies of the funds needed to enact the regulations mandated by the new law, for instance. In fact, that effort has already begun.

It’s not just the House Republicans either. Already the Office of the Comptroller of the Currency has reverted to form, becoming once again a captive of the banks it is supposed to regulate. (It has strenuously opposed the efforts of the A.G.’s to penalize the banks and reform the mortgage modification process, for instance.) The banks themselves act as if they have a God-given right to the profit they made precrisis, and owe the country nothing for the trouble they’ve put us all through. The Justice Department has essentially given up trying to make anyone accountable for the crisis.

Thank goodness, then, for the attorneys general — and for Ms. Warren. On Main Street, where the attorneys general operate, it is pretty obvious that problems persist. During the subprime boom, many states tried to stop the worst lending abuses, only to be blocked by federal banking regulators. Now that the country is dealing with the aftermath of those abuses — the rising tide of defaults and foreclosures — it is the attorneys general who are, once again, put in the position of trying to stamp out abuses, this time of the foreclosure process itself.

Their leverage comes from the fact that the banks and their servicing divisions have, in the words of the University of Minnesota law professor Prentiss Cox, “routinely violated basic legal process” by, for instance, not transferring the note after the sale of a home. But in addition to assessing a financial penalty on the banks, the A.G.’s are trying to use the threat of litigation to force the banks to finally deal with defaulting homeowners more fairly and humanely. That is the essence of the settlement proposal that has been floating around. That — and a big push to finally come up with a modification plan that works.

When I spoke to Tom Miller, the Iowa attorney general — and the leader in this 50-state effort — he said that one reason he had asked Ms. Warren for advice was that she had already hired people with genuine expertise that he wanted to take advantage of. But that’s not the only reason. If the banks were to agree to settle the case on the A.G.’s terms, the Consumer Financial Protection Bureau would be the agency charged with enforcing the terms. So it makes sense to include its current leadership as they work through ideas for a settlement. Besides, the A.G.’s don’t really trust anybody else in the federal government to be on the side of financial consumers. Given their previous experience, why would they? Ms. Warren is the one person in Washington they feel is on the same side they’re on.

The notion that Ms. Warren lacks statutory authority to talk to the attorneys general is an objection so silly it is hard to take seriously. Consulting with the only government officials around who are actually trying to do something for financial consumers is precisely what she ought to be doing. Given that her agency could wind up enforcing the terms, it’s practically a necessity.

As for the idea the Republicans have been spreading talk that the attorneys general are overstepping their bounds by trying to force reform — and a big penalty — on the mortgage servicers, that’s pretty silly, too. As Adam Levitin, a Georgetown law professor, has pointed out on his blog recently, settlements are private agreements between two parties. The banks can accept what the A.G.’s are proposing. Or they negotiate different terms. Or they can reject them outright, and go to court to fight over the proper remedy. It’s really not any different from the multistate tobacco settlement of some years ago, which imposed some minor reforms on the tobacco industry along with a giant financial penalty. Congress had nothing to do with it.

I wish I could say with certainty that the ideas put forth by the attorneys general will finally help ease the foreclosure crisis. I hope they do. Mr. Levitin thought there was a decent likelihood of success; Mr. Cox, a former assistant attorney general himself, was also hopeful — though more skeptical. “So much of it rides on how well it is enforced,” he said.

Which is also why Ms. Warren is the most logical person to be the agency’s initial director: if the settlement does come to pass, no one will understand its terms better, or have a better feel for how to enforce them. Let’s face it: there isn’t anybody in Washington more fearless about standing up to the big banks. No wonder they don’t like her.

As I listened to her on Wednesday, I was struck anew at how clearly she articulates the need for the new bureau. “If there had been a cop on the beat to hold mortgage servicers accountable a half dozen years ago,” she said at one point, “the problems in mortgage servicing would have been found early and fixed while they were still small, long before they became a national scandal.”

Senate Republicans have vowed to block her appointment if President Obama nominates her. Yet even if her nomination goes down in flames, Senate confirmation hearings would be clarifying. Americans would get to hear Ms. Warren explain why the Consumer Financial Protection Bureau has the potential to help Americans. And they would get to hear Republicans explain why the status quo — including the everyday horror of the foreclosure mess — is just fine.

It has been much noted in recent months that President Obama seems unwilling to start a fight with Republicans. Maybe that’s why he has shied away from nominating Ms. Warren to a job for which she is so clearly suited. But if protecting financial consumers — and helping the millions of Americans struggling to hold onto their homes — isn’t worth fighting for, then what is?

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