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N.Y. AG Revising Foreclosure Settlement Complaint Against Wells, B of A

Documentation failings: they aren't just for bankers.

New York Attorney General Eric Schneiderman is revising his allegations of foreclosure settlement violations by Wells Fargo (WFC) and Bank of America (BAC), resetting the clock on his plans to sue the banks over 339 alleged servicing violations.

Under the national mortgage settlement agreement, Schneiderman must give the other settlement parties 21 days before pursuing litigation. Schneiderman asserted during his May 6 press conference that his office was ready to bring a case, making the re-submission something of a do-over.

The cause of the revisions is unclear, as is the question of whether complaints will be resubmitted for each of the cases. A spokeswoman for the office was checking on this late Friday afternoon.

The attorney general "temporarily suspended" his complaints earlier this week, according to the office of Iowa's Attorney General, who is on the monitoring committee for the national foreclosure settlement. Iowa declined to comment on why New York's original grievance was retracted.

"We are sending the [mortgage settlement] monitoring committee more information which we believe will help them in their analysis of their enforcement action," a spokeswoman for Schneiderman told American Banker. "We expect to have that to them by the middle of next week.."

At the original press conference, Schneiderman hoisted a six-inch stack of documents as photogenic proof that Wells and B of A had "flagrantly violated" their obligations to provide timely modification responses and fulfill other settlement commitments.

Schneiderman's spokeswoman did not comment on what, if any, problems the original complaints contained.

Consumer advocates have repeatedly cited instances in which banks have failed to meet the standards laid out in the national mortgage servicing settlement. Banks have acknowledged some of the errors.

Even so, Schneiderman's announcement that he was filing lawsuits raised hackles in the industry, where it was seen as a highly public bid to bypass the compliance process overseen by Joseph Smith, the national mortgage settlement monitor. Smith is expected to release a report on the banks' compliance in the near future.

At the time of Schneiderman's original press conference, Wells Fargo said it was disappointed that the attorney general had opted for "this route" rather than engaging "in a constructive dialogue through the established dispute resolution process." A few days later, Bank of America attorneys sent the New York AG a letter stating that he lacked standing to sue and asking that he retract the complaints.

Both banks declined to comment on the suspension of the complaint. The office of the settlement monitor also declined comment.

"General Schneiderman is the best source for you on his suit's progress," a spokeswoman for Smith's office wrote in an email. "The Monitor continues to be hard at work on his reports about the banks' compliance with the servicing standards and looks forward to discussing what he has found with the public in the coming weeks."

Kate Berry contributed to this article.


(4) Comments



Comments (4)
At first you don't know what you're doing...file, file again!
Posted by JPJC | Monday, May 20 2013 at 11:11AM ET
Important to remember that it was interference from federal bank regulators that thwarted legal actions by state attorneys general and similar local enforcement agencies against national banks' mortgage subsidiaries that could have stopped the ill-advised, sub-prime mortgage frenzy as early as 2006 - well before it grew into crisis proportions.
Posted by jim_wells | Monday, May 20 2013 at 10:15AM ET
Bankers Compliance - Hmm Joke from the Highest levels. The Belittling of the people from all directions of the so called professional figures that have created the deceptions to deceptively swindle the homes from the disabled(meaning every one that does not know the laws, because unless you went to law school, you do not even know what you are signing at origination of your mortgage,credit cards, loans of any kind )(because word in the law focuses on different meanings in court than you were taught when you went to regular school) So who are the Criminals? The reproduction methods of Docs that do not exist any longer and the deceptions of production is so unbelievable. The disabled could not even be expected to expect such unprofessional, immoral, unjustifiable law breaking ect.,ect,. That is occurring. Right now is appears that the Government would super fly in profits so much higher if the would fine and bust every illegal acts that any and every banker and every so called profession in the system would be unemployed. Is this the name of the game with the NWO so they have foreclosed on even the Professionals homes at the end of this game they are so immorally playing??
Posted by lilm16116 | Sunday, May 19 2013 at 3:21PM ET
well, I guess we were right, what a joke! Wells Fargo was "disappointed" the AG took the route he did? They want to let Joseph Smith finish his evaluation of compliance? Joseph Smith is not doing a thing! If a train wreck happens you do not wait until you finish the accident report before taking victims to the hospital. Well, this train wreck has been ongoing! TIME TO JAIL THE BANKSTERS AND QUIT THIS MASQUERADE! Holy batmobile batman the Joker is in the building! What a mess! Someone must be threatening him..no reason to back down, we all KNOW there is no compliance and the crooks are stealing homes as fast as they can with the same fraud!! Here we go again..
Posted by gpanda26 | Sunday, May 19 2013 at 12:18PM ET
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