MA AG Coakley Lawsuit Against Banks Ripped to Shreds in Settlement

So here’s one lagging mystery about the foreclosure fraud settlement: what becomes of Massachusetts AG Martha Coakley’s lawsuit against five banks over deceptive practices and illegal foreclosures? Now we know.

Coakley says in a release that she got a carve-out over certain types of claims in the suit. Others, however, were extinguished in the settlement.

AG Coakley also secured an additional “carve out” to the agreement to allow her office to continue to pursue further relief in the courts against the banks over two Massachusetts-specific issues. Those claims include initiating foreclosures without holding the actual mortgages (so-called “Ibanez” violations) and allegedly corrupting the land recording system through the use of the Mortgage Electronic Registration System (MERS). The agreement will settle all other claims made as part of AG Coakley’s lawsuit against the five banks filed on December 1, 2011.

“Fixing this foreclosure crisis is one of the most important things we can do to restore a healthy economy,” said AG Coakley. “In Massachusetts, this agreement provides for immediate relief and continued enforcement. The banks will provide an immediate infusion of millions of dollars in relief for struggling homeowners. It also allows our office to continue to pursue our claims against the banks for initiating illegal foreclosures in our state and corrupting our land court system. By no means is this settlement the end of our work seeking accountability and relief, as we are continuing to look at the practices of Fannie Mae and Freddie Mac and are participating in the state-federal task force investigating the practices that led to the collapse of our economy.”

Humorously, Coakley writes at the end that she has already recovered $600 million in relief for Massachusetts homeowners. This settlement will net her a little more than half of that, $318 million.

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