The New York attorney general is preparing a lawsuit against Wells Fargo for disregarding the terms of a multibillion-dollar settlement that was meant to stop foreclosure abuses. The bank is the nation’s largest home lender.
The lawsuit, expected to be filed early Wednesday according to the New York Times, says that the bank didn’t comply with the servicing standards laid out by a broad deal between five of the nation’s largest banks and 49 state attorneys general last year.
The settlement sprung from an investigation that began in 2010 when Americans accused banks of relying on mass-produced documents to wrongfully evict homeowners.
New York attorney general, Eric T. Schneiderman, sent a warning to Bank of America and Wells Fargo in May, announcing that he had found both banks in violation of the mortgage settlement. The announcement prompted negotiations between the New York prosecutor’s office and the banks. While Bank of America resolved its issues without litigation, Wells Fargo has not.
Other attorney generals may follow Schneiderman’s lead.