This week, the Massachusetts Attorney General filed suit against Bank of America, JP Morgan, Wells Fargo, Citigroup, and GMAC for their conduct in dealing with the mortgage and real estate crisis. The Massachusetts Attorney General claims that the banks used deceptive and illegal practices in foreclosing thousands of mortgages from 2008 through 2010, including the practice of “robo-signing,” where mortgages were transferred in the secondary market without following formal policies and procedures.
Each of the banks has taken a slightly different position in the lawsuit, some wanting to settle the suit as soon as possible, while others have stated that they will defend themselves aggressively. So, there is a possibility that this lawsuit could develop into a costly and protracted battle in Massachusetts state court.
The major issue that this lawsuit creates is whether the filing of an individual state’s claim against the banks will slow down the ongoing settlement negotiations involving both federal and state prosecutors for a nation-wide deal. The Massachusetts Attorney General stated that the nation-wide settlement discussions were taking too long, but this lawsuit could prolong those discussions even more.
While it may seem like a step in the right direction to file a lawsuit and get the ball rolling against the banks, this lawsuit significantly undermined the collective process. Now, as Massachusetts moves forward with its state-specific claim, there is a distinct possibility that no national settlement will be reached until the Massachusetts suit is resolved, and there’s no telling when that could be.
In short, it seems that Massachusetts has decided to take its bat and ball and go home, and has left the rest of us standing in the field wondering what to do next.
Each of the banks has taken a slightly different position in the lawsuit, some wanting to settle the suit as soon as possible, while others have stated that they will defend themselves aggressively. So, there is a possibility that this lawsuit could develop into a costly and protracted battle in Massachusetts state court.
The major issue that this lawsuit creates is whether the filing of an individual state’s claim against the banks will slow down the ongoing settlement negotiations involving both federal and state prosecutors for a nation-wide deal. The Massachusetts Attorney General stated that the nation-wide settlement discussions were taking too long, but this lawsuit could prolong those discussions even more.
While it may seem like a step in the right direction to file a lawsuit and get the ball rolling against the banks, this lawsuit significantly undermined the collective process. Now, as Massachusetts moves forward with its state-specific claim, there is a distinct possibility that no national settlement will be reached until the Massachusetts suit is resolved, and there’s no telling when that could be.
In short, it seems that Massachusetts has decided to take its bat and ball and go home, and has left the rest of us standing in the field wondering what to do next.
RSS Feed
