BLOG VIEW: Did somebody close down the U.S. Department of Justice (DOJ) without telling us? That theory would seem to make sense, since the department's significant lack of recent activity – let alone results – on issues relating to the housing market could easily raise speculation that the department has been padlocked and shuttered.
Indeed, the DOJ and its leader, U.S. Attorney General Eric Holder, have spent most of the past several months consistently ducking requests to take a leadership role in regard to the potential criminal activity relating to the ongoing housing crisis. And Holder's DOJ has become something of an equal opportunity offender: Calls from both Democrats and Republicans for input and assistance are routinely ignored.
If you don't believe me, let's take a look at what's happening – or, in this case, what's not happening.
In October 2011, Rep. Jon Tester, D-Mont., wrote to Holder asking him to reverse a previous DOJ decision to not get involved in an investigation into claims that 13 of the nation's biggest lenders had violated U.S. Department of Veterans Affairs guidelines by charging improper fees to borrowers who were refinancing their homes. Holder turned down Tester's request and refused to get involved in the matter.
The next month, Sen. Scott Brown, R-Mass., called on the DOJ and the U.S. Securities and Exchange Commission (SEC) to launch a criminal investigation into the government-sponsored enterprises (GSEs) for hiding their ‘massive exposures to the subprime market.’ The SEC has since charged six former GSE top executives with securities fraud, alleging they knew about and approved of misleading statements claiming the companies had minimal holdings of higher-risk mortgage loans, including subprime loans. The DOJ has done nothing.
In December, Reps. Brad Miller, D-N.C., and Walter Jones, R-N.C., sent a letter to Holder that called for a federal investigation of financial services institutions that allegedly violated the Servicemembers Civil Relief Act (SCRA) by illegally foreclosing on active duty servicemembers' homes while some served in the war zones of Iraq and Afghanistan. Holder has never publicly acknowledged the letter, and the DOJ is not investigating the alleged SCRA abuses.
And then there is a problem that has been metastasizing for three years, but has boiled up anew as election-year politics take center stage. Under Holder's stewardship, the DOJ has yet to indict any of the major private-sector players involved in the circumstances that led to the 2008 financial crash. Both the left and the right have criticized this fiasco, and it has fed an angry public's perception that no one will ever be held responsible for designing the economy's collapse.
Yes, I know that Holder announced a new investigation on Friday into determining who was ‘responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities.’ Holder never explained why he waited three years into his term to start this investigation – you don't suppose the timing of the announcement has anything to do with the Obama re-election campaign, eh?
However, the one blip of spontaneous life to emerge from the DOJ came earlier this month, when the department rubber-stamped President Obama's recess appointment of Richard Cordray as director of the Consumer Financial Protection Bureau. However, the DOJ did not announce its opinion of the legality of the appointment until two days after Cordray was sworn in, via an internal memo written by a lower-level DOJ officer – and that memo was not made public until a week after it was circulated around the department. Although several members of Congress have publicly asked Holder to explain the DOJ's role in determining the timing of the Cordray recess appointment, the Attorney General has said nothing on the matter.
Holder's DOJ has been criticized for many other matters beyond housing – most notably its atrocious handling of the fatally botched ‘Operation Fast and Furious’ gun-tracking operation. More than any other Obama cabinet member, Holder has attracted an extraordinary level of criticism about his chronic ineptitude.
Last month, when The New York Times asked Holder about the concern leveled against him regarding his DOJ record, he responded with one of the most astonishing answers imaginable.
‘This is a way to get at the president because of the way I can be identified with him,’ he said. ‘Both due to the nature of our relationship and, you know, the fact that we're both African American.’
Really? No further comment is necessary.
– Phil Hall, editor, MortgageOrb
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