Tag Archives: Attorney General

State attorneys general have until Friday to sign on to a settlement that would resolve claims against the nation's top five mortgage servicers surrounding documentation errors in foreclosure processing, according to a widely circulated media report. The year-long back-and-forth between state counsels and the largest servicers may be in its final days ... possibly. Attorneys general in Delaware and California have already rejected the proposal, and some say without California, in particular, the settlement may not be of interest to the banks.

The special mortgage investigation unit announced by President Obama during his State of the Union address Tuesday night has taken shape. The new Residential Mortgage-Backed Securities (RMBS) Working Group will operate within the Financial Fraud Enforcement Task Force and will consists of at least 55 Department of Justice attorneys and investigators, as well as state attorneys general. The president has tasked the group with uncovering those responsible for pooling and selling mortgage bonds that contributed to the financial crisis.

New York Attorney General Eric Schneiderman has reportedly been designated co-chair of President Obama's new investigative team to probe the mortgage industry for past misconduct. In his State of the Union address, Obama announced the creation of a special unit of federal prosecutors and state attorneys general to examine the risky lending practices that led to the financial crisis. As the industry and the economy stagger toward recovery, some believe digging into the past may not be the best way to move forward.

Illinois Attorney General Lisa Madigan filed a lawsuit against Standard & Poor's this week alleging the ratings agency inflated ratings of mortgage-backed securities investments - an act Madigan believes triggered the financial crisis. The suit, filed in Cook County Circuit Court, relies on internal emails from within the ratings agency as evidence of the company's misrepresentations of risk. Madigan references congressional testimony from a former managing director at S&P, stating ""profits were running the show.""

Despite rumors earlier in the week that President Barack Obama would announce a settlement between the state attorneys general and the nation's top servicers in his State of the Union address, the president made no such announcement Tuesday night. However, he did announce his intention to save millions of homeowners approximately $3,000 annually on their mortgages by allowing them to refinance at today's low interest rates. Obama also plans to create a Financial Crimes Unit to protect consumers from fraud schemes.

Settlement negotiations between state attorneys general and the top five servicers have dragged on for more than a year now throughout frequent reports that a settlement is close. Working out a deal that banks feel is fair and that attorneys general feel serves their states' residents has been challenging at best. However, with a settlement once again reportedly ""weeks away,"" it appears the proposal on the table is agreeable to more than just the five banks involved from day one. Both U.S. Bancorp and PNC may sign on, according to multiple reports.

After HUD Secretary Shaun Donovan announced last Wednesday that a final settlement between state attorneys general and the nation's largest servicers is just weeks away, the news broke Monday that a settlement draft is now in the hands of the attorneys general for review. Dispelling rumors suggesting President Barack Obama will announce the settlement during his State of the Union address Tuesday evening, the lead negotiator for the states has issued a statement saying, ""...we won't reach a settlement any time this week.""

Oregon Attorney General John Kroger has issued a public warning to consumers in the state to be on the lookout for scammers portending to offer independent foreclosure reviews as part of the mandate to major mortgage servicers issued by the OCC and Federal Reserve. Servicers have begun offering case reviews to consumers who faced foreclosure between January 1, 2009 and December 31, 2010. Kroger says scam artists are also contacting Oregon consumers, offering to conduct an ""independent foreclosure home loan review"" or a ""securitization review"" for a fee.

Maryland Attorney General Douglas Gansler and Wells Fargo have reached an agreement to settle allegations that two companies Wells acquired in 2008 - Wachovia and Golden West - used deceptive practices to market adjustable-rate mortgages (ARMs). In addition to loan modifications for certain consumers, Wells Fargo has agreed to pay $940,056 to the attorney general's office for restitution to affected borrowers who lost their homes in foreclosure.

After estimations that state attorneys general would reach a settlement with banks by Christmas failed to pan out, word today is the settlement is weeks away. Negotiation talks between state counsels and the nation's five largest servicers are entering their second year, and a few attorneys general have already left the table. The parties are supposedly ""very close"" to a settlement that would provide 1 million homeowners with principal reductions, according to remarks from HUD Secretary Shaun Donovan on Wednesday.