Sunday, December 4, 2011

State AG Invokes NYS Martin Act To Acquire Jurisdiction In Probe Into Violations Of Federal Servicemembers Civil Relief Act In Home Foreclosures

In New York City, Financial Times reports:

  • Eric Schneiderman, New York attorney-general, has launched an investigation into possibly unlawful foreclosures on the mortgages of active-duty members of the US military.

  • Data released last week by a federal banking regulator suggested that 10 leading lenders may have seized the homes of about 5,000 service members in violation of the Servicemembers Civil Relief Act. The nearly-decade old law restricts foreclosures on the homes of members of the US armed forces while they are on active duty.

  • Mr Schneiderman’s probe is part of a larger investigation into banks’ mortgage practices, a person familiar with the matter said. Armed with the Martin Act, a powerful state law that gives prosecutors broad powers to investigate fraud, New York state’s top lawyer has contacted about a dozen banks and insurers as part of an investigation into the securitisation and marketing of mortgage securities, according to people familiar with the matter. A spokesman for Mr Schneiderman declined to comment.

For more, see New York probes military foreclosures.

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