Earlier this week, NY Attorney General Eric Schneiderman was going to make an announcement to the nation (presumably about the mortgage deal), but then at the last moment, he decided to postpone it indefinitely.Weird.
People were speculating that he was going to announce why he wasn’t going to join the nationwide mortgage deal, probably taking huge states like California with them.
And if California didn’t go in, that would’ve mean $5 billion less for homeowners.
But California did go in, and so did New York. The thing is, Schneiderman got his way in one crucial respect (to him, at least). NPR reports that the lawsuit he filed against banks and MERS, the mortgage filing system they used, will be preserved in the lawsuit.
That means that banks are vulnerable to similar legal action from other states. That said, it remains to be seen how much a lawsuit like Schneiderman’s would actually cost states. If it’s a pretty penny, than we can put this up on the scoreboard as a major loss for banks.
In fact, according to the New York Times, the lawsuit leaves banks open to criminal charges in general. That means the Department of Justice task force that Schneiderman co-chairs (the one that is going to look back to the root of the mortgage crisis) still has teeth.