to use it on my radio show. it implied that the states were stopped from protecting the consumers. >> okay, nancy, martha coakley? >> i was attorney general -- i have been attorney general since 2007. eliot spitzer precede med because i served with attorney general cuomo from new york. the potential agreement you're talking about is not when i was in office. i will say this. as attorney general since that time, and knowing what attorneys general have done, particularly the rule that new york can play because of the martin act and other enforcement ability it has, new york's been an important player on states enforcing consumer rights. and in some instances, overseeing banks. by and large, remember, a lot of oversight in regulation of banks and securities is done by the federal government, whether it's the s.e.c. or enforcement by the department of justice at the federal level. the banks have lobbied for a

long time to be pre-empbted from any state regulation and would prefer to deal with one regulator and frankly they've had friends in congress, i think, that have allowed them to escape the kind of regulation that might have slowed -- i wouldn't say it would have stopped -- but slowed the fallout we now see from the home loan crisis. i would say the attorney's general, particularly in massachusetts, we work at the local level. we started to see in '06 and '06 foreclosure rescue schemes and then we brand the lawsuit that said, when you sell something to somebody that you know or should have known will fail. because you're going to make a fee on it that's an unfair and deceptive act. that's the basis of our proceeding in going after this on a consumer basis. we don't regulate banks by and large but we certainly see the progress that unregulated banks and mortgage companies do and i think what you talk about with attorney general ashcroft saying, no, this is a federal issue. we're going to take care of it

and then not take care of it has been part of the problem all along. i will give credit to our federal partners in this as the state state attorneys general worked with the department of housing and the secretary came to the table with us. i think we have a partnership now moving for war in our task force to look at origination claims and some securitization claims as well as any criminal liability with the state of new york and i hope that we'll continue to both address and provide accountability for what's happened in the past but more importantly to provide real relief to home owners and get out of this and get some stability in the housing market and help with the economic turn around. >> under this $25 billion deal, more than 2 million homeowners could receive payment but we're reading in the papers that's an average of about 2,000 per household? is that adequate? >> let me beclear. that group of people are folks

who have already been foreclosed upon. because this does not deal with sort of origination claims or the fact that the products themselves were unfair to begin with, that payment really is designed to compensate people who have been foreclosed upon for any failures on fairness in the foreclosure itself. not because it was a wrongful foreclosure but because of uncertainty or other costs. frankly, that amount of money, i know per consumer, a drop in the bucket. but this suit was never designed to address wrongful foreclosures per se. that is, the claims that come out of origination, the kinds of claims we brought in fremont or option one or the kinds of securitization claims. this was just o'for behavior by banks while they were in the process of foreclosuring. some people think it's not enough.

that's always the case with a settlement. i think four people who possibility would have been foreclosed on anyway, some amount of relief was appropriate. this was decided upon by the committee and by the banks and it's not enough to compensate someone for wrongful foreclosure but it is to provide relief for behavior during the actual foreclosure, assuming those people would have lost their homes anyway. >> peter is a republican in port orange, florida. you're up next, peter. >> caller: yes. i'm sorry, this is just a bailout. it's another bailout. the facts are getting off the -- the banks are getting off the hook. you're propping up the real estate market. it's a desperate move by desperate people they're just afraid to see their investments go. everyone loved the banks when they were lending money. now that they tightened up their purse strings everybody is cursing them. my question is right now, how is this compared to the roesponsibe

homeowner. that every government person is yielsing all their time and money to fight for a few people that went under water. >> let's take that question, peter. >> peter, i appreciate that you believe what you're saying. i believe that you are sincere in your belief that somehow, this is a bailout that is unfair. and it's unfortunate, i think, that people have looked at one little piece of this. in other words, i was able to make my mortgage payments so why should someone else get help? i look at it totally differently. this is an issue and you can look at a lot of the facts involved in this. many of the people involved bought homes between 2003 and 2004, 2005. and if you look at the value of homes at the time before the bubble happened. before predatory lending and the securitization and the vast unfairness of banks and mortgage

companies selling products to people even though they knew they were going to fail, no documentation loans, no appraisals. you can afford it. you're house can go up in value and you can refinance. all of those promises made where people knew they were going to fail. we know wall street knew they were going to fail. they continued to pump money into this industry to securitize those loans to put the junk mortgages in asset-backed security. so the banks got bailed out. didn't they? i understand that we needed to prevent a crash of the economy. the banks got bailed out and proceeded to foreclosure unfairly on people and all we're saying now is for people who got caught in the middle of all that unfairness, who own homes now that are under water, they can't pay for. sit better for all of us to say is let's let them lose their off and take what they want. let's continue to wreck the economy. those homes will now be sold at

a lower price than they could have been modified for people to stay in. and let's let you, pete, your real estate value go down because we'll continue to have homes in every neighborhood in black across america, with some exceptions, continue to be foreclosed, and continue to be in the downward spiral. if you wanted to say the other side of the coin is -- everybody we can keep in their home is a plus because they're not out on the street. they don't have the stress of losing the home. but more importantly for pete's question, they don't, then, have an abandoned property or a property sold as a short sale or a less value that puts everybody else's home values down and makes it much tougher for everybody to recover from this economy so you can come out that froot point of view that pete has that, this isn't fair. i pay my mortgage, why should someone else get relief. i don't subscribe to that. i think everybody wins when we do this fairly. this solution doesn't help everybody. part of what it does is clear

the way for people who should be foreclosed on. no matter what happened they are not going to be able to stay in their homes. we're talking about a way to make sure we don't have unnecessary foreclosures. that we don't foreclosure on somebody who, with a principal reduction, could make the monthly payments and we time and time again, the bank says, no, we won't reduce your principal. they foreclosure and then the home sells six months later for $40,000. it doesn't make economic or commercial sense. so i appreciate what pete asks. i know that's a question for a lot of people and in the end people will disagree. but make sure we know all the facts about how keeping everybody in a home who can stay there helps the entire economy turn around. >> here's another sentiment. $25 billion, the fed gave those same corrupt bankers over $24 billion in secret bailouts. i want to go to ric, an independent, in billings, montana. thanks for waiting. good morning. >> caller: good morning.

i wanted to comment about this drop in the bucket. this is all water under the bridge. the money was already spent. i say we take the bailout money, the pay back from the bank to receive the bailout. let them go off the appraisers and the realtors to recapture their losses. and, you though, put it on an even scale. it's similar to what the florida caller was saying but it's already water under the bridge and this $25 billion is just a drop in the bucket for the flow-out cost of money that this has caused in the last three to five years. that's all i had to say. it's a bailout in disguise but it's a double-bubble. water under the bridge. >> that's your point, ric. let's have martha respond. >> i don't totally disagree with that caller about this. i've always thought that this is one small piece.

we needed to get past some of this. the banks need to adjust their books on this. they need adopt the servicing standard which they've done so we'll move quickly with modifications and people that need to be foreclosed upon. that's precisely why we said and many of my colleagues said, we're not giving you broad releases for other behavior that we think requires accountability. we'll continue to go after fannie and freddie and we have the task force that we'll look at behavior. i think that people can look at this as a glass half full or a glass half empty or as some people, as less than that. but this is -- we needed to do this piece and, i think we, and the banks, will have to be held accountable for how successful it is. this way the implementation of this agreement is important. the agreement is just the first step. we have to make sure this works. and i hope that some of the callers are wrong. that it won't make a difference.

but i think for some folks and in some places it will and it will help those as i said earlier, the group of people who are in the delinquent or under water. but it's just a piece of a -- a small piece of the puzzle. no question about that. >> here's another tweet from mike murphy and he says, it's not so much a bailout as a copout. the criminals that broke laws, falsified documents belong in prison. make them produce documents. what's next for you, prosecuting some of these banks on criminal activity? what are you looking at? >> i think that one of the things that my colleague in new york has said for a long time was that -- and keep in mind, this was never going to be a release for any criminal behavior. this was only about relief for loan servicing agreements and getting people loan modifications. it was not a release for criminal behavior. and this task force of which new

york is the co-chair with our federal partners, eric schneiderman will held that up with several of us including massachusetts. i'm looking forward to serving on this task force to look at criminal behavior. i've been a criminal prosecutor for a long time. criminal cases are tough but i'm not saying we can't and shouldn't make them. putting people in jail unless we're also keeping people in their homes, doesn't solve the economic problems here so i think we'll can and will proceed on both tracks to hold people accountable when and where we can. but most of the regulation and the information around potential criminal behavior is going to be with the s.e.c. and with the department of justice. we at the state level, will work on the task force to do what we can. and if there is criminal accountability swob be it but i think we cannot pursue criminal

charges without also understanding the need for the kinds of civil actions that are bringing financial accountability in helping address the issues that have been creates by these predatory loans and the securitization of them and the foreclosure mess and holding the banks accountable for their behavior that created this economic crisis. >> forgive me for interrupting you. if you're a viewer and you're not understanding, what constitutes "criminal activity?" what's the smoking gun? >> often in white collar cases, literally there's no smoking n gun. it's about action that's done knowingly, intentionally, to defraud, to commit a larceny. and one of the issues always is, with something that's been this broad and tolerated for so long with a housing bubble that started in '06, '07 and through '08 and we saw the crash or potential crash with the bailout. some of the behavior in this was so widespread you can look at the hollywood movies and read

the books. it was so widespread that everybody seems culpable. one of the tasks is finding the individuals or corporations that we can actually hold accountable for criminal behavior? knowing, intents, for individuals to be held they have to be individual behaving in this. i'm not saying we won't find that but it's tough work to do. >> on the issue of culpability, here's a tweet from stella. why didn't the dodd/frank bill address fannie and freddie. why are they still in business. that's not really a question for you but i want to know what your plans are when it comes to fannie and freddie? >> they're not really in business. they're essentially in receivership with fifa, federal housing financial authority. we sent a letter to the head of fhfa and said you need to address this.

we need the same kind of relief for those loans that fannie and freddie and now, in receivership, can be modified, can have principal reduction. we're working with california, new york, many of the other states in looking for that accountability for homeowners in our states. we work what our federal partners on. but ultimately we need the same resolution that we've gotten in massachusetts and now, with this agreement, to get relief for homeowners. that issue, i think, is a good one to ask your congressman, your senators, they are federally created and federally run and federally overseen. and the hands for -- the ways in which a resolution can be reached with them is probably going to have to be at the federal level. >> so that's the headline, after mortgage settlement fannie mae and freddie mac face renewed pressure on principal reduction. and let me add women's work usa. make no mistakes we want wall

street crooks in shackles. no pats on the hands. no fines, no promises to do better, shackles. diane, a democrat in st. louis, missouri. go ahead. >> caller: i'm calling concerns the lack of monitorship of the states like with the governor of wisconsin taking some of the money for his own state's budget. how is that going to be amended and who's going to monitor the state's part of that is going to go where it's supposed to. >> that's a good question. part of this agreement, and it's based upon a certain formula, depending on the size of the state and number of homes involved, but states are getting a certain amount of money in this agreement that they can use for penalties, so it is appropriate in some instances that state get relief for, as i mentioned earlier, the damage that state government themselves

have felt in cities and towns because of the fallout from homes off the tax rolls. abandoned property, increase in public safety costs. it goes on and on with all the fallout from the mess that states and their cities and towns have had to pay for so some of that can and will go, i assume, to state governments to reimburse them for that. but by and large i think my colleagues and i agree, most of that money should be used for enforcement, implementation and making sure that the relief that the banks have agreed to give to each of our states goes where it should go. to the homeowners and make sure we do this as quickly and fairly as possible. one thing is we know our communities best. we know our not-for-profits and we know the ways in which in our own states we can implement this as fairly and quickly as possible so there's some leeway given to states. given that, we all work together and we'll coordinate on how to

do it best. there's a national monitor but from the colleagues i've spoken to we're really committed to getting in our own states the ways to implement it and oversight it and frankly, rather than having the banks or federal government tell us how to do it i think the -- i respect my colleagues as attorney general asnd respect that we're going to act in the best interest of our states and the constituents in our states on the issue. >> martha coakley, a headline today in "the washington post." fha is a $1 billion beneficiary in this settlement. is it appropriate that part of this $25 billion settlement, $1 billion is to help plug a projected shortfall for the federal housing administration? >> well, i think the federal housing administration and the secretary have played a huge role in bringing about this agreement. i think the cost and expense at the federal level for the kinds of fallout from this foreclosure

crisis. i think it's appropriate and i think that i hope and believe they will be transparent about how they're using that money. the costs involved for the cleanup of this, again, it's just not the robo signing and the piece that went before it, but the cleaning up of this, should be done quickly. the federal housing authority can do this. i think at the federal level. and i think we'll all have to answer for how we use these funds but i believe that we're all committed to putting it where it will best help individual consumers ander start to turn this economy around. >> let's go to andrea, a republican in hazel, texas. andrew, thanks for waiting. >> caller: yes, ma'am. you're look at criminal activity, after four years how many thousands of people in massachusetts alone do you currently have under indictment for this? i don't just mean the c ceo

and -- >> i'm sorry i missed the question. individual homeowners? >> no. i think he's talking how many people, individuals do you have under indictment in the state of massachusetts? >> well, it's an interesting question, because for eye long time since i came in '07 we fought to get a mortgage fraud statute. i think you have to understand that for many states the criminal tools are well behind the eight ball. because much of this activity has been real preempted by federal regulation, states and including states like massachusetts, haven't had all of the tools to go after criminal behavior. i've been a prosecutor for a long time. i brought ftough cases on publi corruption and we have mortgage fraud cases now. if i can bring in a criminal case, i'm going to do it. i have to have the discovery available. i have to have the facts. criminal case, i think, people misunderstand are always difficult to make. we will continue to do that.

i also know that we have to pursue the civil remedies to make sure that we get the economic relief for people. if you're being forfeited, if if you're being foreclosed on and thro thrown out of your house, it's small comfort someone else is going to jail. >> let's go to mark, a democrat in california. >> caller: good morning. i have two questions. when are we going to split up the investment banks and the banks that we bank at? i wish there was a law that president clinton signed where he let -- he let investment banks and the banks merge. what happens to the people that lost their homes and the banks

that didn't have the titles to them? some of those people had a lot of money invested in their homes, and they got foreclosed on improperly, and they didn't have the paperwork. especially veterans. i'm a vietnam veteran and i know for a fact that there's a lot of people that got foreclosed upon. i think it's disgusting. i know there's a law out there that prevents that, and it should be looked into. >> martha coakley. >> sure. in rooefreverse, mark, i totall agree with you. no veteran, no man or woman serving their country overseas or out of state should be foreclosed upon. there are federal rules and state rules.

we've tried to enforce that. i know that many of my colleague, my colleague in oregon, john kroger, has made that a big issue. all of us owe that to our veterans, and we in massachusetts are on the lookout for that and there is -- there are penalties for banks. i agree with you that that is disgusting that happens. secondly, there are people wrongfully foreclosed upon. it's one of the reasons why we insisted in this agreement that we carve out two of the claims we brought in massachusetts on that very issue. we've had a court ruling here that says if you do not hold the mortgage, you can't legally foreclose on it. so this cutting of corners, rush to get everything done has created chaos from the market and as the call from california pointed out, illegal behavior for people wrongfully foreclosed upon. those are issues that still need resolution. it's part of this continuing problem, frankly, in terms of

banks' accountability. we're going to continue to pursue that. the first question you asked about the regulation issue, i think you're going to have to talk to your congress folks about that. that's an issue to be resolved at the federal level. >> jim leaf has this specific question for you on twitter. from what i have read this does not reduce principal but lowers payments only if your payment is more than 31% of gross income. why? >> well, that's not exactly right. as i said earlier at the top of the hour here when we started, this settlement is going to provide, we hope, relief for two sets of folks. one, those who are about to default or already delinquent, the people who need a loan mod fi modification of terms but there's a second group of people underwater. because their home is now worth less than their actual mortgage it will include for those folks

a principal reduction. there are formulas involved on this. it's too complicated to get into here, but i suggest if you're one of those folks who think you can survive with a principal reduction, you should call your lender asap. get on the phone and get in line and let them know and start working on a loan modification that would include a principal reduction if you're eligible for it. i appreciate that question, and it goes to the idea that many of these homes at the time they were purchased had an overinflated value. because now the market is back to where it was before this housing bubble was created, we believe and the banks have agreed it makes commercial sense to write down some of those principals and keep that homeowner in his or her he home. we hope that can happen. if if you're in that category, you should immediately contact one of your -- the bank that has your loan, and if you have trouble with that, contact your attorney general in the state in which you live. >> speaking of contacting the

banks, we showed this earlier. we want to show it again. the phone numbers of the five banks that settled with you and the other state attorneys general. if you have questions and if one bank is your provider, the phone numbers are on the screen. so, again, if you have questions about it, call those numbers. those are the banks that participated in this $25 billion settlement deal. another question for you on twitter from robin. won't this settlement make bank rates increase overall? what about those of us who kept with our mortgages during crisis? will the banks just pass this cost onto the other consumers? >> well, they frankly are not supposed to. it's part of the reason why there's a monitor. why we're going to watch this. that question comes from, i guess, what is a really cynical population and rightfully so about the banks passing on fees and losses.

we see that all the time in consumer protection. we see that obviously bank of america understanding they might find another place on to pass the fee on with a debit card and decided not to do that. this is not just about this settlement and about what we say as attorneys general. i think this is a really important consumer moment for people like that caller to say, you know, this is different ways in which we hold banks accountable including for the fees they charge, the prices that go up. you do have options. look, we've had had some issues with the national banks and the mortgage companies. take a look at what your community bank, your savings loan, what your credit union is doing in your community. people and consumers can take their assets elsewhere and do their business elsewhere. i mean this in terms of having transparency about where this

money is going to, and p if you don't like the principles or policies of what your banks are doing, be vocal about it. it does have an impact. this is a time for consumers to get educated about what they pay for when they use banking services. we try to do that every day with consumer products when we reach an aagreement, as we do here. i don't think this should be passed along to consumers. it is a market, and some of this happens. but consumers play a role here, and i encourage you to get educated about some issues and stand up for your rights as consumers here. >> the new consumer protection bureau is out with a new prul for mortgage servicers in the "washington post" this morning. the new consumer watch dog on monday outlined the first steps of plan on regulate mortgage servicers which came under fire for fraudulent foreclosure practices. they will revamp the billing statement sent to homeowners and the disclosures required for some complicated mortgages. it also is drafting new rules to

present servicers from improperly charging insurers for homeowners insurance. what do you make of the new rules? >> i'm a big supporter of the bureau and my former colleague is the head of it and understands these issues. i think he and the staff there understand the need for this kind of consumer-oriented regulation that will help consumers become better educated so that, first of all, we don't have the kind of bubble that happened last time around in this housing crisis. he we also and i think rich understands and we need to make sure that banks continue to make loans, that they can continue to provide money to businesses and homes who were trying it to borrow money. we don't want to go so far to the other end that we slow the economic recovery around either. there's a sore lack of regulation that focus on this