WASHINGTON: US President Barack Obama announced the creation of a special unit to investigate dodgy mortgage lending Tuesday, as he stepped up the pressure on the country's big banks.
"Tonight, 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," Obama said in his State of the Union address.
"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."
His comments come amid a stream of legal complaints against big banks over foreclosures and unfair lending practices, and amid persistent rumors that a grand bargain could see banks agree to pay out $25 billion to end legal proceedings.
The cash would be used to help homeowners who owe more than their home is now worth, or those that had their homes wrongfully repossessed.
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