City Council Votes to Support Schneiderman’s Investigation of Mortgaging Practices

The City Council today passed a resolution in support of New York State Attorney General Eric Schneiderman’s investigation into the mortgage packaging practices of several banks and it calls upon a taskforce of 50 state attorneys general to preserve his investigatory and prosecutorial powers, according to New York’s Martin Act, in any settlement with major financial institutions.

At the end of last month, Schneiderman was removed by Iowa State Attorney General Tom Miller as a leader of a panel negotiating a settlement with U.S. mortgage servicers after he was accused of trying to undermine the work of the group.

The City Council resolution, sponsored by Council Speaker Christine Quinn, and Council members Robert Jackson and James Gennaro, notes that Schneiderman is concerned that settlement by the 50 State Attorneys General Taskforce would give the major banks too much protection from all future mortgage collapse-related litigation. That could restrict his office from proceeding with its current investigation and impede future investigations or legal action taken in the area of mortgage security fraud, the resolution states.

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