“This investigation has been about robosigning and loan modifications for homeowners, so the release in the settlement should mirror that; it should be a narrow release,” said Illinois Attorney General Lisa Madigan (no relation to Iowa’s Madigan). “It was never intended to serve as a settlement for all the violations that the nation’s banks have engaged in.”
Schneiderman has insisted that too hasty a settlement could let banks off too easily. He wants a more comprehensive investigation into all aspects of the mortgage crisis, followed by a larger settlement that would bring relief both to struggling homeowners and large institutional investors who bought mortgage-backed securities that turned out to be worthless.
But some state and federal officials involved in the talks argue that such an approach would be unwieldy and could take too long. The logistics of having large investors and individual homeowners lumped together “are absolutely insane,” one of the officials said. “This was never intended to be everything under the sun. . . . This is about one aspect of this, and for that aspect, this is a . . . good settlement.”
Another person familiar with the situation, who like some others requested anonymity to speak more freely, said Schneiderman had been pressured by state and federal officials to drop his opposition to the potential settlement, which would force five of the nation’s largest banks to overhaul their servicing models and dedicate more resources to helping troubled homeowners. They also would have to pay about $20 billion in penalties to fund foreclosure prevention efforts.
http://www.washingtonpost.com/business/economy/ny-bumped-from-50-state-foreclosure-committee/2011/08/22/gIQAG636ZJ_story_1.html
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