According to a February 2008 Washington Post article by New York governor Elliot Spitzer, state attorneys-general who wanted to investigate allegations of mortgage fraud were blocked from doing so by the Office of the Comptroller of the Currency within the U.S. Treasury Department.
Next the issue of a selected coterie of banks receiving one-fifth of a trillion dollars to guarantee these banks’ mortgage-backed junk bonds.
One single, lonely politician stood in the way: New York Attorney General Eliot Spitzer.
Spitzer not only took on mega-mortgage company Countrywide, he took on their predatory enablers in the investment banking community. Bank of America, Goldman Sachs, Merrill Lynch and Citigroup’s Citibank that made mortgage usury their major profit centers.
The very same day the bail-out was decided, the man called ‘The Sheriff of Wall Street’ was cuffed. Spitzer was silenced.
No federal agency was charged with regulating mortgage fraud to take up the slack. The rest is history.
[Listen to radio report]