NYT: Donovan
Pressuring NY AG
On Servicing Settlement
 U.S. Department of Housing and Urban Development Secretary Shaun Donovan is reportedly trying to force New York Attorney General Eric T. Schneiderman to accept a settlement of the nation's major servicers that would prohibit future state-level investigations and prosecution of potential mortgage banking improprieties.
The New York Times, citing unnamed sources, reports that Donovan and "high-level Justice Department officials" have engaged in a "campaign" to get Schneiderman's unconditional acceptance of a settlement deal, which would require the state attorneys general to agree to not pursue additional litigation relating to servicing and securitization practices. Schneiderman - along with his counterparts in Delaware, Massachusetts and Nevada - has openly objected to this aspect of the proposed settlement.
"The attorney general remains concerned by any attempt at a global settlement that would shut down ongoing investigations of wrongdoing related to the mortgage crisis," said a Schneiderman spokesperson.
In an interview with the Times, Donovan sought to downplay the appearance of undue pressure on Schneiderman.
"Eric and I agree on a tremendous amount here," Donovan said. "The disagreement is around whether we should wait to settle and resolve the issues around the servicing practices for him - and potentially other attorneys general and other federal agencies - to complete investigations on the securitization side. He might argue that he has more leverage that way, but our view is we have the immediate opportunity to help a huge number of borrowers to stay in their homes, to help their neighborhoods and the housing market." |
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