New York Attorney General Eric Schneiderman announced at a press conference
this afternoon that his office will be suing Bank of America Corp (BOA) and
Wells Fargo and Co for violating the $25 billion settlement they agreed to one
year ago. Reports are that the suit
could be filed within the next two months.
Schneider said his office has documented 339 violations of standards
established by the settlement that dictate the timeline for banks to process
applications for mortgage modifications.
Wells Fargo has 210 alleged violations and BOA 129.
The National Mortgage Settlement involved three other banks in addition to
Wells Fargo and BOA. It settled claims
and lawsuits with 49 state attorneys general and several federal regulatory
agencies. In addition to the cash
settlement the banks agreed to cut mortgage debt amounts, restructure troubled
loans, and meet new servicing standards.
Joseph Smith, former North Carolina Banking Commissioner who heads the settlement
monitoring committee is expected to report within the next few weeks on progress
made by the five servicers in meeting the settlement terms. .
Under the settlement any of the several parties can bring action against the
banks after a 21 day notice to the monitoring committee. Schneiderman said he has informed the
committee of his intentions and the committee has the right to proceed on litigation
of its own or defer to his suits.
Schneiderman did not comment on whether the other three banks involved in
the settlement, JPMorgan Chase, Citigroup, and Ally Financial, were performing
under the lawsuit to New York's satisfaction.