Three states conducting their own probes of residential mortgage practices are resisting broad liability releases sought by banks to settle a nationwide foreclosure investigation.
The banks, in settlement talks with state and federal officials, are seeking releases that would protect them from future legal liabilities. Massachusetts Attorney General Martha Coakley said yesterday she won’t endorse a deal that includes certain releases. New York and Delaware have raised similar concerns over terms of a possible deal.
All three states are conducting investigations tied to mortgage operations of banks. Delaware and Massachusetts officials say a settlement shouldn’t release banks from some claims, including those related to bundling mortgages into securities, while the inquiries continue.
“We’re not prepared to do a broad liability release for either securitization issues or for MERS until we’ve completed that piece of investigation,” Coakley said in a telephone interview yesterday. Mortgage Electronic Registration Systems Inc., or MERS, is a national mortgage database used by banks.
Basically, Coakley is saying that if there is a release on securitization fraud, she will not sign onto the deal, and the banks know that if they are ever effectively pursued on securitization fraud, they are dead, so no deal.
To the rest of the AGs, get off your ass, and convene a grand jury, the rest of the AGs, and stop letting yourself get strong-armed by Obama, Holder, and company to go easy on the banks.
H/t Naked Capitalism.