Victims of the crooked foreclosures are being victimized again as fighting rages among the attorneys general of the statesinvolved over whether the banks involved will be exempted from lawsuits.
Attorneys general from states like New York, Massachusetts and Delaware that have strong enforcement of fraud laws want to have the ability to file suit against the banks. Others think the deal on the table is too harsh on the banks. The banks involved are Bank of America, J.P. Morgan Chase, Ally Financial, Wells Fargo, and Citigroup.
On Tuesday, everything came to a head. New York Attorney General Eric Schneiderman was kicked off an executive team by Tom Miller, attorney general of Iowa. Miller said Schneiderman was trying to derail any kind of deal between the states and the banks.
The states are trying to hammer out a deal that includes comprehensive mortgage policy and practice changes that ultimately will aid consumers, particularly homeowners who are delinquent in their payments. The banks are using the lawsuit immunity card as leverage. In other words, the banks are willing to commit to the changes if they will not be sued in the future.
Until an agreement is made, the money – reported to be $20 million – the states are to collect from the banks to modify home mortgages and provide counseling to homeowners who find themselves underwater in their mortgages is up in the air.
Right now, everyone is looking to what New York will do. If they back out, the settlement may be less.
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