Schneiderman ousted from national mortgage settlement talks

August 24, 2011 09:24AM

New York Attorney General Eric Schneiderman

New York Attorney General Eric Schneiderman has been removed as a leader of a panel negotiating a settlement with U.S. mortgage servicers, Bloomberg News reported, after he was accused of trying to undermine the work of the group.

“New York has actively worked to undermine the very same multi-state group that it had spent the previous nine months working very closely with,” said Iowa Attorney General Tom Miller, who is leading the state group. For a member of the executive committee, that “simply doesn’t make sense, is unprecedented, and is unacceptable.”

America’s largest mortgage providers have been negotiating a deal with the Department of Justice and 50 state attorneys general to work out foreclosure issues, including robo-signing. A proposed settlement could range as high as $60 billion, and include provisions for principal reduction, sources said.

Schneiderman had openly criticized any possible settlement that would protect banks from state investigations by providing the lenders with broad releases from liability. [Bloomberg]