New York to Sue Wells Fargo, Bank of America Over Mortgage Practices

New York State’s attorney general plans to sue Wells Fargo & Co. and Bank of America Corp. over alleged violations of a national mortgage settlement reached last year.

Attorney General Eric Schneiderman’s office said Monday it intends to sue the banks for “repeatedly violating the terms” of the settlement.

Schneiderman’s office said that since October, it has documented 339 violations of tightened standards aimed at helping homeowners in danger of losing their homes.

The $25 billion settlement provided relief for homeowners across the country who had been subjected to faulty foreclosure practices by major servicers.

The agreement also set new standards for mortgage-servicing operations, and required some improvements in customer service. Among the standards are four cited by Schneiderman’s office that involve timelines for processing applications for mortgage modifications.

The five mortgage servicers that signed onto the settlement were legally required to take specific steps to protect homeowners, Schneiderman said in a statement.

“Wells Fargo and Bank of America have flagrantly violated those obligations, putting hundreds of homeowners across New York at greater risk of foreclosure,” he said.

Wells Fargo declined to comment. A Bank of America representative did not immediately respond to a request for comment.

The banks that signed on to the mortgage settlement also included Ally Financial/GMAC, JPMorgan Chase & Co. and Citigroup Inc.