New York discusses fifth anniversary of financial meltdown

NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman discussed progress made in the last two years Friday in holding certain entities responsible for the misconduct that caused the global financial crisis.

Schneiderman made the statement on the five-year anniversary of the Lehman Brothers bankruptcy filing that triggered the worldwide crisis. He discussed the events that led to the crisis and the steps his office took to help New York's families recover.

"Five years ago, fraudulent acts, misjudgment, and a pursuit of profit over principle brought the American markets to the verge of collapse, undermining the economic security of families across our state," Schneiderman said. "While our economy is on the road to recovery, the fight to give working families a fair shake continues."

Schneiderman said the country has a long way to go to rebuild the middle class, restore investor confidence and build the housing market for faster job growth. He said his office will do everything in its power to achieve those goals.

"With too many New Yorkers still fighting foreclosure, and banks that still refuse to play by the rules, we must do everything in our power to stand up for hardworking families," Schneiderman said. "That includes helping rebuild communities, educating homeowners on their rights, and expanding access to legal guidance that can make the difference between a family keeping their home or facing foreclosure. It means continuing the fight for real accountability for the illegal and deceptive conduct that created the housing bubble and crashed the global economy."

Schneiderman led a coalition of 49 attorneys general in reaching the $25 billion National Mortgage Settlement with the five largest mortgage servicers in the U.S. His office used the state's $136 million settlement award to launch the Homeowner Protection Program to provide foreclosure prevention and legal services to struggling New Yorkers. Schneiderman also announced his intention to put $20 million of the settlement funds toward land banks to help communities restore vacated or abandoned properties.

In addition, Schneiderman proposed two pieces of legislation to help New Yorkers facing foreclosure, the Certificate of Merit Bill and the Foreclosure Fraud Prevention Act. The Certificate of Merit Bill, which was signed into law, will help facilitate homeowners' participation in court-supervised mediation sessions when negotiating alternatives to foreclosure. The Foreclosure Fraud Prevention Act, which was passed by the Assembly, would impose criminal penalties on mortgage servicers and lenders who deceive homeowners when handling foreclosures.

"The 2008 financial crisis was a tragic and powerful reminder that when the rich or powerful play by their own rules, it undermines our whole nation," Schneiderman said. "By returning to our founding principle of equal justice under law, we can not only restore the trust of the American people in our financial system, but also guarantee that this kind of crash will never happen again."