Massachusetts AG Readies Foreclosure Suits Against Major Servicers
By: Carrie Bay
With little faith that ongoing negotiations between state officials and major mortgage servicers will result in a fair and just settlement, Massachusetts Attorney General Martha Coakley signaled Wednesday that she will be taking her case to the courts.
“Our office is aggressively proceeding with efforts to file lawsuits regarding creditor misconduct in connection with unlawful foreclosures,” Coakley said in a statement.
She did not disclose which companies would be targeted, but cited servicers’ failure to establish their right to initiate foreclosure and filings of false or misleading documents with registries in the Commonwealth of Massachusetts as the basis for the impending legal actions.
Talks between the nation’s largest mortgage servicers and attorneys general from across the country have continued
for nearly a year now. The objective? To settle claims that servicers engaged in robo-signing and other unauthorized practices related to foreclosures and the servicing of past-due loans.
“I have lost confidence that the banks will bring to the table an agreement that properly holds them accountable for wrongful foreclosures,” Coakley said Wednesday. “Because our office for some time has anticipated that result, we have begun preparing for litigation.”
Market analysts have advised for months now that an agreement between state officials and servicers needs to be reached quickly in order to lift the cloud of doubt hanging over the industry and allow loans clogging the foreclosure pipeline to make their way through.
But negotiations between the two parties continue to unravel. Last week, California Attorney General Kamala Harris withdrew from the settlement talks, stating that the current proposal is “inadequate” for homeowners in her state.
New York Attorney General Eric Schneiderman was removed from the executive panel working toward a settlement in August.
Attorneys general from several other states – including Delaware, Kentucky, Minnesota, and Nevada – have not formally resigned from the settlement negotiations, but have all publicly expressed their dissatisfaction with the direction the talks are taking.
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