NEW YORK (Legal Newsline) -- New York Attorney General Eric Schneiderman says to expect more banks to settle over their residential mortgage-backed securities.
On Tuesday, Schneiderman, other state attorneys general, the U.S. Department of Justice and a state and federal working group he co-chairs announced they reached a $13 billion settlement with JPMorgan Chase.
According to The New York Post, the attorney general said Wednesday "other banks will follow."
However, he would not name the banks.
"We can now take the resources that were dedicated to Bear Stearns, Washington Mutual and JPMorgan and direct them at other targets and accelerate the process of drafting complaints, conducting investigations in order to get other banks to the table," he said, the Post reported.
The JPMorgan agreement is the largest settlement with a single entity in American history, and resolves federal and state civil claims arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities by JPMorgan, Bear Stearns and Washington Mutual prior to Jan. 1, 2009.
The settlement requires JPMorgan to pay $9 billion and provide $4 billion in consumer relief, including mortgage modifications for homeowners at risk of foreclosure.
Also under the settlement, JPMorgan will be required to provide $2 billion in principal reductions to borrowers, including first and second liens and forbearance and provide an additional $2 billion in financial relief for borrowers and communities, including:
- Refinancing at lower interest rates;
- Donation of bank-owned properties or bank-controlled distressed mortgages to nonprofits or land banks; and
- New mortgage loans to low-and moderate-income families harmed by the financial crisis.
Compliance with the settlement will be overseen by an independent monitor.
The settlement was negotiated through President Barack Obama's Financial Fraud Enforcement Task Force's Residential Mortgage-Backed Securities Working Group, which was formed in 2012 to share resources and continue investigating wrongdoing in the mortgage-backed securities market prior to the 2008 financial crisis. Schneiderman co-chairs the group.
Schneiderman and the attorneys general of California, Delaware, Illinois and Massachusetts conducted their own, related investigations.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.