The Massachusetts Attorney General has announced a major lawsuit against the biggest banks in the foreclosure game, namely Bank of America, JP Morgan, Citigroup, Wells Fargo, GMAC (now Ally) as well as MERS and its parent MERSCorp.
It seeks accountability for violations in the foreclosure process, including robosiging, initiating foreclosures when they were not entitled to do so, the use of MERS (both a violation of land records requirements and what amounts to unjust enrichment via failure to pay local recording fees) and deceptive practices in foreclosure (as in failing to offer modifications as required by law and would be good for borrowers).
In the press conference, Coakley described that there were numerous unnecessary and illegal foreclosures, and cited how not for profits had succeeded in obtaining loan mods, yet were unable to get mods processed for vastly larger number of similar borrowers.
She stressed how the banks didn’t care about the impact of their actions on borrowers and communities, and engaged in the same sort of reckless conduct as they did in predatory mortgage lending.
Coakley specifically discussed what amounts to a failure of the 50 state settlement negotiations, particularly the failure of the banks to provide accountability and their insistence on obtaining broad relief, including on MERS-related issues, which Coakley said Massachusetts had said was always off the table as far as she was concerned. She had said the negotiations had taken too long and were unwilling to provide real relief.
This is an important step forward, and shows clearly what a sham that the so called “settlement” talks.
The claim is detailed and the banks look to be in very hot water. The lawsuit, for instance, describes the specific and detailed steps that a bank must take in order to disclose in Massachusetts (including giving the borrower the right to cure the default before accelerating the debt) and also (per Ibanez) questions whether the parties had taken the steps to put themselves in a position to act. It describes how the target banks did not have the mortgage at the time of filing for foreclosure.
Coakley said she intends to move the litigation forward quickly.
The claim is here. This is an important step forward.