NY Attorney General Accused of Undermining Settlement
By: Krista Franks
Iowa Attorney General Tom Miller Tuesday announced the removal of New York Attorney General Eric Schneiderman from an executive panel of state officials working toward a settlement with several of the nation’s largest servicers over alleged improper foreclosure practices.
In a statement the same day, Miller, head of the committee, said, “New York has actively worked to undermine the very same multistate group with which it had been working very closely over the previous nine months.”
Miller said the New York attorney general’s actions were “unprecedented” and “unacceptable.”
The committee includes attorneys general from 13 states (excluding New York): Arizona, California, Colorado, Connecticut, Delaware, Florida, Illinois, Iowa, North Carolina, Ohio, Tennessee, Texas, and Washington.
Two state banking regulators – the Maryland Office of the Commissioner of Financial Regulation and the New York State Banking Department – are also members of the committee.
Within the committee is a smaller negotiating team, which includes attorneys general from California, Colorado, Florida, Illinois, Iowa, North Carolina, Texas, and Washington.
While Schneiderman was part of the executive committee, he declined an invitation to join the negotiating committee, according to Miller’s statement.
Schneiderman has opposed any settlement that would prevent further investigations into the major servicers’ previous foreclosure practices. He maintains such a settlement would be unfair to many investors not covered in the proposed deal who would then be unable to seek damages.
Schneiderman advocates for further investigation into the servicers’ mortgage practices and a larger settlement that would address both homeowners and investors affected by the alleged violations.
Schneiderman is not the only attorney general to oppose the settlement. In fact, another member of the executive committee – Delaware Attorney General Beau Biden – has also spoken out specifically against the proposed Bank of America settlement.
Biden responded to Miller’s action Tuesday evening with the following statement: “Whether on or off the Executive Committee, Attorney General Schneiderman has and continues to raise important and legitimate concerns about the scope of the releases being demanded by the banks as part of the multistate settlement, concerns he and I have raised for many months with our colleagues.”
He continued, “I believe that the events leading up to the mortgage crisis must be fully investigated, including origination and securitization practices, before any broad immunity is granted – the American people deserve an investigation.”
Nevada and Massachusetts attorneys general have also spoken out against the immunity offered banks in the proposed settlement.
According to a spokesperson in Miller’s office, a decision by New York not to participate in a future settlement would not hinder the deal.
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