N.Y.’s Action Against B of A, Wells Likely to Draw Other States
WASHINGTON — New York Attorney General Eric Schneiderman’s opening salvo in the escalating battle over banks’ compliance with last year’s mortgage settlement is already fueling expectations that other states could soon follow suit.
More than a year after attorneys general in nearly every state agreed to a $25 billion deal with the five biggest servicers — requiring them to provide relief for borrowers affected by faulty servicing practices — several officials and housing advocates are crying foul over how banks are complying.
For right now, Schneiderman stands alone in seeking to take action against Bank of America and Wells Fargo, and it remains unclear whether Joseph Smith, the independent monitor overseeing the settlement, and an oversight committee for the deal will join the New York attorney general.
But several observers said the extent of concerns over how banks are implementing the relief may compel other states to get involved.
“I imagine that New York will not be the only state gravely concerned about reports that these servicing standards are still being violated,” said Julia Gordon, director of housing finance and policy at the Center for American Progress.