Millions of Americans saw their mortgages go underwater in the last few years as property values declined significantly. Now it seems that some of the companies or individuals partly responsible for the housing market collapse could be held to account for their actions.
A federal task force put together to investigate those responsible for the housing market’s collapse as a result of the packaging and sale of extremely risky mortgage-backed securities could soon bring charges against either individuals or financial institutions who engaged in the activity, according to a report from Reuters. The Residential Mortgage-Backed Securities Working Group, co-chaired by New York Attorney General Eric Schneiderman, is likely to bring at least civil cases, if not criminal ones, against several “bad actors” involved in the process.
“We’ll see actions being taken sooner rather than later,” Schneiderman told the news agency. “It’s important to convey the sense that no one is above the law. There’s a set of rules to which all will be held accountable, including big players on Wall Street.”
The RMBSWG also includes involvement from the U.S. Departments of Housing and Urban Development, and Justice, as well as the Securities and Exchange Commission and the Internal Revenue Service, the report said. It was formed by President Barack Obama in January to look into the practice of selling these risky packages of mortgages, which led to the financial crisis that began in 2008.
However, many have criticized the group for not acting quickly enough, and Schneiderman note this is the result of it not having a full staff, the report said. With the group up to full strength, it should be set to receive more resources from the federal government and more aggressively pursue action against those involved in the problem.
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The sale of mortgage-backed securities that then turned toxic in turn led to the housing market collapse and the financial recession, and the effects those two events had on consumers was massive. As a consequence, millions of Americans saw their homes’ values take significant dives while they faced more financial concerns including late payments on credit cards, mortgages, and other lines of credit. Only in the last few months have property values begun to increase appreciably once again for the first time in years.
Image: mrbill, via Flickr