N.Y. Plans Homeowner Enforcement Against Financial Firms
Original Amazing Schneiderman post here…
New York Attorney General Eric Schneiderman said he will announce new enforcement actions against major financial institutions as part of his effort to “protect New York homeowners” after calling the first such lawsuit last year a “template” for future litigation.
In October, Schneiderman sued JPMorgan Chase & Co., alleging that Bear Stearns, which JPMorgan took over in 2008, deceived mortgage-bond investors about defective loans backing securities they bought, leading to “monumental losses.” He said the case would be a model for future actions against banks that issued mortgage bonds during the real estate boom. He sued Credit Suisse Group AG on similar grounds the next month.
“We do expect this to be a matter of very significant liability, and there are others to come that will also reflect the same quantum of damages,” Schneiderman said last year. “We’re looking at tens of billions of dollars, not just by one institution, but by quite a few.”
New York was one of 49 states that reached a $25 billion settlement with five mortgage servicers, including Bank of America Corp. (BAC), Wells Fargo & Co., and JPMorgan, to end a probe of abusive foreclosure practices. Schneiderman’s office had agreements with 12 financial institutions that preserved claims that might be filed against them, a person familiar with the matter said last year. The so-called tolling agreements prevented the statute of limitations, which bars litigation after a specific number of years have passed, from expiring.