Attorneys General Align to Investigate Mortgage Loan Servicers and Prevent Improper Foreclosures
As set out in our advisory of July 1, 2009, the vital decision of the United States Supreme Court in Cuomo v. Clearing House Association, LLC, et al. produced an avenue for states to enforce national bank compliance with certain state civil and criminal laws, including fair lending practices and state consumer protection laws. The Supreme Court's decision allowed Attorneys General to proceed with enforcement actions through court proceedings, but remained vague as to the permissibility of actions through investigations or administrative proceedings. Regardless, the ramifications of Cuomo are unraveling as all eyes turn to analyze the actions of mortgage loan servicers.
Today, Attorneys General have joined together in one of the largest multi-state investigations in recent history, combining not only Attorneys General of 50 states but also the concomitant offices of state banking and financial regulators. This is one of the largest and most divergent investigations in recent history. Moreover, this investigation is novel because it is one of the few where Attorneys General are aligning their efforts with their respective relevant state regulatory agencies.
As indicated in the email alert of October 13, 2010 these Attorneys General will also be attempting to work with federal enforcement authorities, as authorized under the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The press release circulated by the National Association of Attorneys General, whose effort is being spearheaded by Attorney General Tom Miller of Iowa, makes it apparent that the Attorneys General are analyzing the application of their respective state consumer fraud laws to various mortgage loan servicers.
If you have any questions or would like additional information, please contact Ashley L. Taylor, Jr. at ashley.taylor@troutmansanders.com or 804.697.1286.