State AG Invokes NYS Martin Act To Acquire Jurisdiction In Probe Into Violations Of Federal Servicemembers Civil Relief Act In Home Foreclosures

In New York City, Financial Times reports:

• Eric Schneiderman, New York attorney-general, has launched an investigation into possibly unlawful foreclosures on the mortgages of active-duty members of the US military.



• Data released last week by a federal banking regulator suggested that 10 leading lenders may have seized the homes of about 5,000 service members in violation of the Servicemembers Civil Relief Act. The nearly-decade old law restricts foreclosures on the homes of members of the US armed forces while they are on active duty.



• Mr Schneiderman’s probe is part of a larger investigation into banks’ mortgage practices, a person familiar with the matter said. Armed with the Martin Act, a powerful state law that gives prosecutors broad powers to investigate fraud, New York state’s top lawyer has contacted about a dozen banks and insurers as part of an investigation into the securitisation and marketing of mortgage securities, according to people familiar with the matter. A spokesman for Mr Schneiderman declined to comment.

For more, see New York probes military foreclosures.