As Obama homes in on $25B mortgage settlement, New York AG holds out for more
New York State Attorney General Eric Schneiderman is hindering federal efforts to negotiate a foreclosure settlement with Wall Street banks on behalf of homeowners, the Wall Street Journal said, by insisting banks should pay for investor losses, too.
In combating the robo-signing practice, the Obama administration “is very far down the road for a settlement that will create servicing standards and will also result in a significant financial contribution towards helping homeowners,” an administration official said, that is believed to be worth nearly $25 billion. Schneiderman, who was removed from leading the settlement panel because of his aggressiveness earlier this week, wants to punish the banks and extract more money in a settlement, and has support from several other state prosecutors, all of which are needed to sign off on the agreement.
Some within the negotiations want Schneiderman to sign off on the consumer settlement, and attack the banks on behalf of investors separately, the Journal said. But Schneiderman believes the agreement would preclude him from prosecuting banks for mortgage-related activity. While Schneiderman is “committed to a comprehensive solution,” his spokesperson said, other state officials say “we’re interested in helping homeowners… we’re not interested in helping hedge funds.” [WSJ]