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New Financial Crimes Unit Could Throw Wrench in ‘Robo’ Settlement
CNBC.com | January 25, 2012 | 12:49 PM EST

Barely a few days ago, word was that a settlement among state attorneys general and the big banks over faulty foreclosure practice, i.e. “robo-signing”, was imminent.

In fact, there was a big meeting on Monday in Chicago to try to seal the deal. It included Secretary of Housing and Urban Development, Shaun Donovan, Associate U.S. Attorney General. Thomas Perelli, and several Democratic AG’s, including the lead negotiator, Iowa Attorney General Tom Miller.

Now some say that could all be for naught.

During his State of the Union address, President Obama announced he was ordering the U.S. Attorney General to create a “Financial Crimes Unit,” its number one task being to go after the banks for faulty mortgage originations and securitizations.

“I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans,” the President said.

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