Massachusetts Attorney General Martha Coakley has sued five national banks for allegedly pursuing illegal foreclosures on properties in her state.

 

Bank of America, Wells Fargo, JPMorgan Chase, Citi and GMAC are accused of violating Massachusetts law with “unlawful and deceptive” conduct while foreclosing on homes. The banks used false documentation, deceptive practices related to loan modifications, and robo-signing, in which bank employees electronically sign thousands of documents and affidavits without manually verifying the information contained in the document or affidavit.

 

“The single most important thing we can do to return to a healthy economy is to address this foreclosure crisis,” said Coakley. “Our suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law. Our action today seeks real accountability for the banks illegal behavior and real relief for homeowners.”

 

The lawsuit continues a trend of numerous states refusing to accept a bank-friendly deal being brokered by the Obama administration with big banks over their illegal and unethical foreclosure practices. The Obama settlement would protect the banks from future lawsuits.

 

The New York Times wrote that Coakley’s action “diminishes the likelihood of a comprehensive settlement between the banks and federal and state officials to resolve foreclosure improprieties.”

-Noel Brinkerhoff

 

Five National Banks Sued by AG Coakley in Connection with Illegal Foreclosures and Loan Servicing (Attorney General Martha Coakley)

Complaint Filed by State of Massachusetts against Banks (pdf)

Mass. Sues Banks Over Deceptive Foreclosure Practices (by Pallavi Gogoi, Associated Press)

Massachusetts Sues 5 Major Banks Over Foreclosure Practices (by Gretchen Morgenson, New York Times)

California Breaks off Negotiations with Obama Administration about Bank Investigations (by Noel Brinkerhoff, AllGov)