New York plans to continue cracking down on financial institutions responsible for the mortgage crisis.
New York Attorney General Eric Schneiderman plans to sue Bank of America (BofA) and Wells Fargo for purportedly violating terms of the record-breaking $25 billion foreclosure-abuse settlement that 49 states reached with the country’s five largest mortgage lenders in February 2012.
Schneiderman’s forthcoming suits will be the first against any of the settlement participants for allegedly breaking the settlement’s terms, which required participating banks to follow more than 300 servicing standards when working with struggling homeowners. Since October 2012, Schneiderman’s office has counted 210 violations involving Wells Fargo and 129 violations involving BofA.
“The five mortgage servicers that signed the National Mortgage Settlement are legally required to take specific, rigorous, and enforceable steps to protect homeowners,” Schneiderman said in a press release. “Wells Fargo and Bank of America have flagrantly violated those obligations, putting hundreds of homeowners across New York at greater risk of foreclosure. I intend to use every tool available to my office to hold these companies accountable under the terms of the National Mortgage Settlement.”
Schneiderman’s legal action comes after he sued JPMorgan Chase & Co. last October, claiming it defrauded investors with defective mortgage-backed securities. He also sued Credit Suisse Group AG for similar reasons in November.
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