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FEATURE SECONDARY MARKET Just Words? The Obama administration launched the Residential Mortgage- Backed Securities Working Group to collar crooks responsible for misrepresenting junk mortgage loans before the crisis. Does an all-star cast really want names—or does it amount to just words and work to wow voters in an election year? By Ryan Schuette F or all the fanfare their annual addresses receive, presidents of the United States rarely blaze trails with the language their speechwriters help coin for State of the Union speeches. President Barack Obama seemed to prove as much during his primetime address in January. Far from boldly promising hope or change, analysis website Wordle.com found that Obama's speech paralleled calls to action by his predecessors—including JFK, Franklin Roosevelt, even George W. Bush—by frequently referencing "America," "jobs," "right," and other emotionally charged words. With a general election around the corner—and a financial crisis barely behind the nation—housing got more than a few mentions, too, making a progressive, black, 21st century president sound less like FDR and more like his trust- busting older cousin, Teddy. "Millions of Americans who work hard and play by the rules every day deserve a government 74 | THE M REPORT and a financial system that do the same," he said, spotlighting Consumer Financial Protection Bureau (CFPB) director Richard Cordray, servicing reforms he repackaged as a Homeowner's Bill of Rights, new refinance expan- sions—and a "Financial Crimes Unit" that officials came to word- ily term the Residential Mortgage- Backed Securities (RMBS) Working Group. "No bailouts, no handouts, and no copouts," he declared. "An America built to last insists on responsibility from everybody." Just what is the Working Group? Obama billed it as a task force primed to bring in those most responsible for fraudulent and abusive lending practices in the lead-up to the financial crisis. Unveiling it not one week after, co-chairs New York Attorney General Eric Schneiderman and U.S. Attorney General Eric Holder didn't disappoint—or stray far from Obama's flair for no- nonsense wordiness. Simultaneously announcing subpoenas for 11 undisclosed fi- nancial institutions, Schneiderman vowed that the Working Group would levy "appropriate civil and criminal charges" against those responsible for securitizing bad pools of loan debt, bilking misin- formed investors, and making bets against the economy. Holder said that the group "will improve our ability to recover losses, to prevent fraud, to bring abuses to light, and to hold those who violate the law accountable." Ed Pinto, a former Fannie Mae executive and research fellow with the conservative-leaning American Enterprise Institute, offers a few choice words of his own for the Working Group: "I think government officials are looking for people to pin blame on when they really should look in the mirror." He says the task force risks politicizing a mortgage industry that learned to operate within wide parameters set by succes- sive presidents and lawmakers. "This is the largest and most coordinated attention to securities organized by federal and state regulators," adds Michael Missal, head of policy and regulation at K&L Gates, a high-profile law firm based in Washington, D.C. "I think it may have an impact on the economy as well." Is the Working Group—a task force chaired by state and federal officials, supported by a growing a number of attorneys, investigators, and agents—fluff in an election-year speech or new policy as tough as a certain Rough Rider's big stick? Getting the Facts R esponding to reporters about a shortage of action to collar RMBS crooks, Holder said during a press conference that "the notion that there's been inactivity . . . is belied by a troublesome little thing called fact." He referred to a string of suc- cessful mortgage fraud cases and cited the creation of the Financial SECONDARY MARKET ANALYTICS SERVICING ORIGINATION