The nationwide foreclosure probe so optimistically announced a few weeks ago by Iowa’s Attorney General Tom Miller is facing some hurdles as it struggles to unite members in a common goal to examine the processes used by major lenders to enact foreclosures. In fact, according to an interview with the Wall Street Journal, James E. Tierney, director of the National State Attorneys General Program at Columbia Law School, says that getting the probe underway is, in some ways, comparable to “cat-herding”[1].

Probably one of the biggest issues that the AGs face is that 10 of the 12 members of the foreclosure investigation’s executive committee, including Miller himself, are running for reelection and could be leaving office in the coming months. Add to that more petty issues like whether or not the investigation should be called an “inquiry” or an “effort” and you have the potential for stalls around every corner. However, there are “signs that state officials are working together closely” to gain leverage over major lenders, and Miller believes that the AGs will ultimately “push to clean up the mess quickly,” which the entire investigation believes will boost public confidence in the housing market. Miller does not believe that the operation can or should drag on for even the extent of a year. “That would be too long,” he says.

Tomorrow, Miller’s fate will be decided along with that of many other AGs up for election. His competition, Brenna Findley, is backed by Sarah Palin and has raised $1.4 million for her campaign. It is unclear exactly what will happen to the investigation if Miller is ousted. His goal is either to exact penalties in the form of huge fines that could be used to help distressed homeowners in the form of a settlement or for lenders to “fully fund” the modification process and enact sweeping loan modifications. However, Bruce Marks, chief executive of the nonprofit Neighborhood Assistance Corporation of America, believes that Miller or his successor has a ways to go before the investigation will yield any such results. “The question is whether he can get the others to the same place where he is at on this stuff,” says Marks, who wants a nationwide foreclosure moratorium until the probe is completed.

Do you think this national AG probe is a good thing for the housing market? Do you want your AG involved and are you voting accordingly?

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[1] http://online.wsj.com/article/SB10001424052748704477904575586320312052784.html