Reform reading: New York AG takes aim at Bank of America

State probe questions validity of mortgage securities, foreclosures

By

 Updated:

crystalbat

A daily round-up of commentary, analysis and news related to the Dodd-Frank law.

Bank of America investigated - The New York attorney general is targeting Bank of America Inc. in a new investigation that questions the validity of "potentially thousands" of mortgage securities and their foreclosures, the Huffington Post reports.

Sources told HuffPo that Attorney General Eric Schneiderman's probe is part of a bigger investigation examining if mortgage companies and Wall Street firms took the necessary steps under New York state law when creating mortgage-backed securities.

If legal steps required for securitization -- like taking mortgage documents from one party to another -- did not comply with New York state law, HuffPo said that the investors who bought the bundled loans could force the companies to buy them back. And state investigators also find that those securities aren't valid financial instruments and take action under state law.

Forums on swaps, capital  – Financial regulators meet this week to clear up confusion over swaps oversight and bank capita requirementsl, two of the most contested areas of reform.

The Federal Deposit Insurance Corp on Tuesday will finalize rules for bank capital requirements. On the same day, the Commodity Futures Trading Commission will discuss missed deadlines in finalizing its new rules to police the swaps market.

FDIC nominee – President Barack Obama plans to nominate Martin Gruenberg, vice chairman at the Federal Deposit Insurance Corp. since 2005, to succeed current chairman Sheila Bair when she steps down from the agency in July.

Gruenberg is expected to easily win Senate confirmation, reports the Wall Street Journal, due in part to his previous experience as a longtime aide to then-Sen. Paul Sarbanes, (D-Md) which won him respect among Republicans. As a Democrat, Gruenberg is recognized for his support of robust financial regulation, the Community Reinvestment Act, and other community- development initiatives.

If confirmed, Gruenberg would oversee the FDIC as it grapples with increased responsibilities under Dodd-Frank, including oversight of the nation's largest financial institutions and the lead role in breaking up failing financial institutions that can’t otherwise be dissembled under regular bankruptcy proceedings.

Care about freedom of the press? Support independent investigative journalism.

Donate now
Donate now