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If you missed the second part in an article quoted by Steven D’s fp story – Goldman Sachs CEO Lawyers Up.
Attorney General of N.Y. Is Said to Face Pressure on Bank Foreclosure Deal
(NY Times) – Representatives for the four big banks declined to comment. Mr. Schneiderman has also come under criticism for objecting to a settlement proposed by Bank of New York Mellon and Bank of America that would cover 530 mortgage-backed securities containing Countrywide Financial loans that investors say were mischaracterized when they were sold.
The deal would require Bank of America to pay $8.5 billion to investors holding the securities; the unpaid principal amount of the mortgages remaining in the pools totals $174 billion. Lawyers representing 22 institutional investors, including the Federal Reserve Bank of New York, BlackRock and Pimco, contended that the deal was favorable.
This month, Mr. Schneiderman sued to block that deal, which had been negotiated by Bank of New York Mellon as trustee for the holders of the securities. The lawsuit contends that the deal could “compromise investors’ claims in exchange for a payment representing a fraction of the losses” experienced by investors and that it had been negotiated without the knowledge of all of the holders of the securities.
The lawsuit angered Bank of New York Mellon, and as Mr. Schneiderman was leaving the memorial service last week for Hugh Carey, the former New York governor who died Aug. 7, an attendee said Mr. Schneiderman became embroiled in a contentious conversation with Kathryn S. Wylde, a member of the board of the Federal Reserve Bank of New York who represents the public. Ms. Wylde, who has criticized Mr. Schneiderman for bringing the lawsuit, is also chief executive of the Partnership for New York City. The New York Fed has supported the proposed $8.5 billion settlement.
Other investors in the Countrywide mortgage pools who were not part of the settlement talks between Bank of New York Mellon and Bank of America have called the terms inadequate.
Characterizing her conversation with Mr. Schneiderman that day as “not unpleasant,” Ms. Wylde said in an interview on Thursday that she had told the attorney general “it is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street — love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.” Mr. Schneiderman declined to comment on the encounter.
Mr. Schneiderman has opened an investigation into Wall Street’s mortgage machinery, especially examining whether loan documents were provided to the trusts as required under securitization contracts. The New York attorney general’s office has hired Lynn E. Turner, former chief accountant of the Securities and Exchange Commission, as a consultant on the investigations, people briefed on the inquiries said. [Lynn Turner on bank’s fair value accounting]
Damon A. Silvers, associate general counsel for the A.F.L.-C.I.O., is also serving as a special counsel on a pro bono basis. Both men declined to comment.
- New York Times Tells Obama Administration Off, Backs Schneiderman on Mortgage Settlement
- Bank of America Uses Attack Dog, Kathryn Wylde, to Smear NY AG Schneiderman
"But I will not let myself be reduced to silence."
