White House again calls for calm in foreclosure crisis

Maybe they missed it, but people don’t exactly have the greatest faith in the way the White House negotiates with anyone about anything. They certainly haven’t been impressive from a consumer perspective with the banks so far and it was only a few months ago they decided to play nice with BP as well. Everyone can appreciate the negative impact of delayed business in this economy but people can also appreciate the harshness of throwing a family onto the street.

Telling the public that the Justice Department will get tough but not open a criminal investigation could lead people to believe that another big talk, little action move is ahead. For some reason this administration is afraid of conflict and ready to fold at even the slightest hint of it. They forget that they have already played the “let’s talk tough but act nice behinds the scenes” card a few too many times. Asking nicely does not work with this industry. It also doesn’t win over a suspicious public that is already upset with the financial industry.

The full extent of the foreclosure mess is still coming into focus. Congress has called for a hearing on the subject, and the housing market in certain parts of the country has come to a near standstill.

The officials on Sunday stopped short of announcing a criminal investigation, and did not suggest that one was imminent. Instead, Mr. Donovan wrote that the Financial Fraud Enforcement Task Force — a coalition of federal agencies and United States attorney’s offices — has made the foreclosure issue “priority No. 1,” adding that Attorney General Eric Holder has said that if wrongdoing was discovered by the task force, it “will take the appropriate action.”

“Banks must follow the law,” Mr. Donovan wrote on The Huffington Post, “and those that haven’t should immediately fix what is wrong.”


An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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