That’s how long the American people and 11 million underwater homeowners have waited for President Barack Obama and his federal mortgage task force to get to work.
The president announced on Jan. 24, during his State of the Union address, the formation of a federal mortgage fraud task force to “hold accountable those who broke the law.”
But three months later, the panel’s silence has been deafening. Now we’re faced with a mystery: the case of the missing mortgage fraud task force.
The unanswered questions would give Nancy Drew a headache.
First, where is the director to lead the investigation? There’s been no word on who this person is. Or when he or she will come on board to get the investigation moving.
Second, where are the investigators? The Obama administration promised 55. This isn’t enough. The savings and loan scandal had a staff of more than 1,000. Enron — just one company, under a Republican president deeply tied to the chief executive officer — had more than 100. The idea that a staff of 55 could possibly hold the broad and complex mortgage industry accountable for itspossible crimes since 2008 seems impossible.
Perhaps most important — when will the actual investigation and accountability start? After a flurry of subpoenas in January, there has been near radio silence. Where are the indictments? Where are the remedies?
There are genuine fears that on many of the possible offenses committed by the big banks, statutes of limitations could run out. The clock is ticking — we need movement now, for underwater homeowners and our economy’s overall security.
What’s not in question is the task force’s great potential, what it could mean for American homeowners and the 99 percent. If done right, these investigations could have serious results: Big banks held accountable (high-level executives facing criminal penalties) for the crimes against the American people and our economy; meaningful settlements for underwater homeowners.
Because of big banks’ recklessness and their toxic lending practices, home values plummeted and we are now drowning in debt. The task force can — and should — press the banks to examine hundreds of billions in principal reduction for the people who have suffered because of big bank fraud.
The announcement of the federal mortgage task force came right before the pitiful $25 billion settlement between big banks and the 50 state attorneys general, with the Obama administration playing a key background role pushing for completion. No banks were held financially accountable in a meaningful way. And, in reality, only $17 billion will likely go toward principal reduction, compared with the more than $700 billion in underwater mortgages, which is one of the main obstacles to rebuilding the economy.
But there should also be a real federal investigation that would hold big banks accountable for their actions and provide real relief for millions of underwater homeowners.
A minimum of $300 billion in principal reduction would represent roughly the amount of underwater debt of moderate-, middle- and low-income, owner-occupied families. It doesn’t cover the underwater mansions or the vacation homes of the 1 percent. But it will dramatically improve not only the lives of those families hit hardest by the housing collapse but the economy as a whole. Principal reduction will finally bring stability to housing prices, allowing them to begin to rise across the board.
Principal reduction is also how we can jump-start the economy. Families can use the extra money every month to buy groceries, school supplies and other essentials, pumping billions of dollars back into the economy and helping create jobs.
With the task force, Obama has the opportunity to show 11 million underwater homeowners and the more than 4 million people who have had their homes foreclosed how he can work to hold Wall Street accountable.
This is critical to his election campaign. With the grueling election season upon us, Obama could demonstrate how he can reset the American economy.
We cannot wait for change.
In 2011, 5,171 properties received a foreclosure filing each day. That’s at least 465,390 filings over the 90 days we’ve been waiting for action from the task force. In 2012, the numbers are expected to be even higher.
Obama must act to make sure the task force has a real leader to ensure the investigation is moving ahead, that it has the director it needs and full staffing resources. He can make it all happen now.
Tracy Van Slyke is co-director of the New Bottom Line, a national campaign challenging big banks on behalf of struggling and middle-class communities. This article originally appeared in Politico.