NY AG: Need to Fix Street's 'Rigged Casino' Impression
New York Attorney General Eric Schneiderman told CNBC that Bank of America and Wells Fargo were the leading violators of a settlement designed to end mortgage servicing abuses, and that's why he plans to sue on behalf of homeowners in his state.
"The mortgage servicing settlement agreement has 304 different standards and deadlines that banks have to [legally] comply with," he said in a "Squawk Box" interview Tuesday. "These two banks were far out in front of every other institution in terms of violations."
(Read More: New York to Sue BofA, Wells Fargo Over Mortgages)
In February 2012, BofA and Wells Fargo were among five banks that agreed to the $25 billion settlement over faulty foreclosure practices and the mishandling of requests for loan modifications.
In a statement, BofA said it takes the allegations by Schneiderman "seriously and will work quickly to address" them. "This agreement has been good for New York, and we continue using these beneficial programs to assist troubled homeowners."
As for Wells Fargo, the bank said, It's "committed to full compliance with the National Mortgage Settlement and its associated standards. It is unfortunate that the New York attorney general has chosen this route rather than engage in a constructive dialogue through the established dispute resolution process."
"What happened over the past decade, it is unprecedented and it has convinced the American people that the Street is a rigged casino. That offends me," Schneiderman continued, "and we're looking to correct that impression by entering into an agreement ... you have to comply with the rules."
The New York attorney general's announcement comes ahead of a key report from the monitor of the settlement—its first assessment of compliance on troubled borrowers, including how quickly banks must respond to requests for loan modifications.