| NEW YORK
NEW YORK May 10 Bank of America Corp
has fired back at New York Attorney General Eric Schneiderman
after he threatened to sue the bank for violating the terms of a
$25 billion settlement designed to end mortgage servicing
In a letter to Schneiderman, lawyers for Bank of America
said they were "surprised and disappointed" the attorney general
thought the bank engaged in "flagrant violations" of the
timeline to process mortgage modifications.
The lawyers also said Schneiderman cannot sue until the bank
has an opportunity to cure any alleged violations.
"Bank of America has not committed any potential violations
... let alone failed to cure those potential violations,"
attorneys Meyer Koplow and Theodore Mirvis, of Wachtell, Lipton
Rosen & Katz, wrote in the May 7 letter. Reuters obtained a copy
of the letter on Friday.
Schneiderman announced on Monday that he planned to sue Bank
of America and Wells Fargo & Co for violating the terms
of last year's National Mortgage Settlement, which was brokered
between five major banks and 49 attorneys general.
Schneiderman did not say how the other three banks -
JPMorgan Chase & Co, Citigroup Inc and Ally
Financial Inc - were performing.
He said Bank of America had 129 violations since October and
Wells Fargo had 210 and that their tardiness put homeowners at
greater risk of foreclosure.
On Friday, Wells Fargo said it was committed to abiding by
"We expect that a constructive pathway may still develop
with the New York AG," the bank said in a statement.
Asked about the Bank of America letter, Schneiderman's
spokesman, Damien LaVera, said: "At least Bank of America will
respond to one New Yorker promptly."
LaVera said the attorney general has "the right to bring a
suit against parties that violate the servicing standards and
will do so."
Schneiderman has said he would seek injunctive relief and an
order requiring the banks to comply with the settlement. His
statement did not say he was seeking damages or penalties.
It is unclear how far he can take his efforts because they
come outside the primary channel authorized by the settlement to
address any potential violations. The settlement's monitor is
authorized to first work with a servicer to correct any
potential violations and sue only if the errors are not fixed.
Bank of America said that, under the terms of the
settlement, the attorney general's office has no right to
commence an enforcement action and requested that the notice of
intent be publicly withdrawn.
The bank's letter asked for evidence of any violations so it
could provide remediation to homeowners without waiting for any