The foreclosure fraud that the banks have perpetrated against homeowners is a full blown national scandal.  

So why is this administration so reluctant to call for a moratorium on foreclosures?

In fact, Obama and his minions seem to be protecting the banking fraudsters, the hell with struggling homeowners.

Nomi Prins explains the administration's foot dragging at AlterNet.

"At first, there was a deafening silence from Treasury Secretary Tim Geithner and Fed Chairman Ben Bernanke on the foreclosure front. It was as if they: 1) didn’t read the news; or 2) were afraid someone would notice afresh their incompetence in dealing with the ongoing housing crisis and deteriorating economy, while convincing everyone that the bank bailouts and subsidizations were good for us.

"Last week, while Senator Harry Reid, House Speaker Nancy Pelosi and others in Congress were dispensing irate pre-election sound-bites, attorneys general across the country were gearing up for investigations. Banks were reluctantly announcing foreclosure moratoriums because it’s quarterly earnings season and uncertainty is bad for stock prices, and Geithner was defending TARP and mixing it up with China over the dollar. Meanwhile, the Fed was gearing up to buy more Treasuries, like some kind of rapacious alien that eats its progeny, because no one else wants our debt.

"But that changed when Geithner came out of hiding yesterday with a stance.  (Bernanke is still in hiding, but will support Geithner’s view soon.) Unsurprisingly, Geithner chose to side with the likes of conservatives and CNBC. Thus, his response to Charlie Rose when asked whether he supported banks in declaring a foreclosure moratorium was: “No, I wouldn’t say it that way.”

"Why? Geithner’s logic follows the typical blame-the-little-guy-for-taking-on-too-much-debt-to-buy-a-house-he-couldn’t-afford pattern, coupled with old-style fear-mongering: if you wait and analyze what’s really going on, it might be bad for the housing recovery. And, what housing recovery is that? The one in which 25-30 percent of homes being sold are REOs (bank owned real-estate, a.k.a. foreclosed properties). On a trading floor, that’d be considered "churning," not new value.

"The free-market, let the banks do what they do mentality was what allowed them to create a $14 trillion mountain of securities backed by precarious mortgages to begin with. Don’t look at what they’re doing, that might hurt the boom. Don’t ask them for anything in return for bailouts -- that might clog the system. Don’t stop them from churning foreclosed properties -- that might stop the recovery.

"But the real reason for Geithner’s reluctance about a foreclosure moratorium is that he’s scared stiff about those securities – because even if he won’t admit it, he knows that the bailout wasn’t just about TARP and Bernanke isn’t just an economic savior.

"The government owns or is backing trillions of dollars worth of assets predicated on the same or similar suspicious loans that defaulted during the 2008 crisis period, which they did nothing to stop (or force banks to restructure).  (Bold added.)

"Instead, the Fed now owns nearly $1.5 trillion of toxic assets that have no bid (meaning no one but the Fed wants them). They would have less of a bid if there was even more uncertainty about the loans that fill them. The Treasury is directly backing $400 billion of government-sponsored entity (GSE) securities, and is indirectly backing another $6.8 trillion. If foreclosed homes couldn’t be sold because of fraudulent paperwork or had to wait for more detailed inspections, you can imagine how difficult selling assets stuffed with faulty loans might be. If it’s tough to find a title for a foreclosed home, think how tough it is to back the related loan out of a pyramid of securities sitting on top of it.

"The reason TARP and all the other subsidies happened was that Hank Paulson, Ben Bernanke, Tim Geithner (the pillage gang) and the most powerful Wall Street CEOs were scared. Banks had stopped trusting each other (no one cared about the person who couldn’t pay their mortgage, or had their home taken, whatever the reason). When there is no confidence in the market, there is no bid for securities, no matter what the reason.

"Foreclosure fraud is not new. Many sane people and organizations have been talking about fraud for years -- you don’t manufacture $14 trillion worth of mortgage-backed securities and all their permutations and mega leverage out of $1.4 trillion worth of subprime loans in five years without cutting a lot of corners. Banks knew that. But when the value of their assets plummeted, unlike individual borrowers, they got to dump them on the Fed and the Treasury department, while receiving cash injections and guarantees, and cheap money subsidies in return.

"Geithner’s stance is a sad reminder of how much things have resumed to business as usual....

"Selling REOs to hedge, private equity and asset management funds in bulk is the hot new business. (Small now, but so were CDOs when I first warned about them in my 2004 book, Other People's Money.) Banks aren’t being nice to those deadbeat borrowers who were too dumb to foresee a housing and financial market collapse due to the overzealous fee-seeking attitudes of securitizing and trading banks. No, having gotten a multi-trillion dollar federal life raft, the big banks are prudently trying to salvage a growing business.

"Meanwhile, Geithner and Bernanke are helping them, desperately trying to maintain the illusion of recovery and the narrative that their previous efforts worked, amidst the stockpile of crap they own and the slew of ongoing loan-level problems they will steadfastly do nothing to address."

Read the entire Prins piece and see how this corporatist administration ignores the common good because it really doesn't give a damn about Main Street, only its Wall Street cronies and covering the financial industry and the administration's posteriors.