In a threat to a national settlement related to the foreclosure “robo-signing” investigation, the attorney general of Massachusetts has filed suit against Bank of America Corp. (NYSE: BAC), J.P. Morgan Chase & Co. (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC), Citigroup Inc. (NYSE: C), Ally Financial, and Mortgage Electronic Registration System (known as MERS) for alleged unlawful and deceptive foreclosure practices.
The banks and MERS, which processes foreclosure documents, had hoped to settle complaints about deceptive foreclosure practices in one massive agreement covering all 50 states. The filing in Massachusetts now opens the door for other state attorneys general to also break away from a single settlement and sue the banks individually.
Clearly the banks do not want to fight dozens of separate lawsuits and would much prefer a single agreement. Massachusetts’ action may serve to concentrate the banks’ minds to offer a more generous agreement than they had originally intended to put on the table.
Massachusetts attorney general Martha Coakley has scheduled a press conference for 1 p.m. ET today to discuss the charges against the banks.
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