N.Y. AG, FHFA official to work together in mortgage probe
NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman and the inspector general of a federal agency that oversees Fannie Mae and Freddie Mac are joining forces to investigate banks accused of mortgage fraud.
According to the Huffington Post, Schneiderman and Steve Linick of the Federal Housing Finance Agency recently signed an agreement to share resources.
The report comes days after the federal Securities and Exchange Commission announced it charged six former top executives of Fannie Mae and Freddie Mac with securities fraud.
The commission, in its complaint filed Friday in the U.S. District Court for the Southern District of New York, alleges the executives knew and approved of misleading statements claiming the companies had minimal holdings of higher-risk mortgage loans, including subprime loans.
Fannie Mae and Freddie Mac -- despite owning an ample chunk of the mortgage debt in the country -- are not part of the ongoing settlement talks with Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc., Ally Financial Inc. and Bank of America.
Earlier this month, Iowa Attorney General Tom Miller, who is leading the talks with the nation's top mortgage servicers, said he hoped a settlement with the banks would be finished by Christmas.
For months, Miller and a group of state attorneys general have been in discussions with the five banks over their mortgage foreclosure practices.
The probe began last October with inquiries into so-called "robosigning" practices by several mortgage companies, and has since broadened into identifying and addressing additional alleged improper practices.
Since being dropped from the nationwide talks in August, Schneiderman has been conducting his own investigation into the industry.
The partnership between him and Linick should only help the attorney general's investigation, which was recently broadened to include illegal foreclosure practices by banks on active-duty military members.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.
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