New York Attorney General Eric Schneiderman was removed from a leadership role in negotiating a nationwide foreclosure settlement with U.S. banks because his office "actively worked to undermine" the effort, a state official said.
Schneiderman, who doesn't want a settlement to bar further investigations of mortgage practices by individual states, was removed from the executive committee of state officials working on the deal, Iowa Attorney General Tom Miller said late Tuesday in a statement.
"New York has actively worked to undermine the very same multistate group that it had spent the previous nine months working very closely with," said Miller, who is leading the state group. For a member of the executive committee, that "simply doesn't make sense, is unprecedented and is unacceptable," Miller said.
Attorneys general from all 50 states last year announced their investigation into bank foreclosure practices after reports that faulty documents were being used to seize homes. Since then, a group of attorneys general and officials from federal agencies, including the Justice Department, have been negotiating a settlement with the five largest mortgage servicers in the U.S.
Government officials are seeking an agreement that provides funding for writedowns on mortgage loans for borrowers and sets standards for how the banks service loans, interact with borrowers and conduct foreclosures, according to terms proposed in March.
