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Massachusetts prepares to sue banks over foreclosures

October 5, 2011 |  1:58 pm


Massachusetts Atty. Gen. Martha Coakley said she is preparing to sue the nation's big banks for allegedly wrongfully foreclosing on borrowers after having "lost confidence" in settlement talks aimed at resolving the matter.

The banks -- Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. -- are in settlement discussions with state and federal officials and seeking releases that would protect them from future lawsuits.

California Atty. Gen. Kamala Harris bowed out of the negotiations last week, saying the banks were asking for too much and vowing that her office would launch a more rigorous investigation.

Coakley has said she won’t sign on to a deal that includes broad legal release. New York, Delaware, Nevada, Kentucky and Minnesota have also signaled that they are unhappy with the proposed deal being discussed because of legal release from liability being offered to the banks.

New York and Delaware have been cooperating in their own probes separate from the coalition.

Coakley has indicated she would not support an agreement that was too easy on the banks or potentially impeded further investigations.

Below is her full statement released Wednesday:

“I have lost confidence that the banks will bring to the table an agreement that properly holds them accountable for wrongful foreclosures. Because our office for some time has anticipated that result, we have begun preparing for litigation. Our office is aggressively proceeding with efforts to file lawsuits regarding creditor misconduct in connection with unlawful foreclosures, including the failure to establish the right to start a foreclosure as well as filing false or misleading documents with registries in the Commonwealth. We will, as we have in the past, use our resources to hold the big banks accountable to fully protect homeowners and restore a healthy economy.”


California bows out of probe of mortgage lenders

Kamala Harris a key player in settlement over mortgage crisis

Kamala Harris explains decision to exit mortgage settlement talks

-- Alejandro Lazo

Photo: Activists rally in San Jose earlier this year. Credit: Associated Press.