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New York AG Eric Schneiderman Investigating Foreclosures On Active-Duty Military Members

Eric Schneiderman Military Foreclosures

First Posted: 11/30/11 05:26 PM ET Updated: 11/30/11 05:26 PM ET

New York Attorney General Eric Schneiderman is launching an investigation into possibly illegal foreclosures on homes owned by members of the military and their families, Shahien Nasiripour of the Financial Times reports.

The investigation is part of a broader probe by Schneiderman to investigate the mortgage practices of major banks, a person familiar with the matter told Bloomberg.

About 5,000 homes owned by active-duty members of the military and their families may have been foreclosed on by 10 leading lenders in violation of the Servicemembers Civil Relief Act, which aims to protect members of the military from financial distress, according to data released last week by the Office of the Comptroller of the Currency.

Bank of America and Morgan Stanley reached deals with the Justice Department earlier this year to settle claims that they foreclosed on more than 175 active-duty servicemembers without court orders.

JPMorgan Chase also admitted to illegally foreclosing on 27 active-duty members of the military earlier this year.

Schneiderman has been one of the most outspoken AGs on banks' foreclosure practices. He's led the push by some attorneys general to get a narrower settlement between government officials and the nation's biggest banks over claims that they illegally foreclosed on American homeowners.

Government officials and states' individual 50 attorneys general started the probe after reports of "robo-signings" and other potentially improper foreclosures came to light.

Schneiderman may have suffered for his criticisms of the deal; he was booted off the committee leading the talks between government officials and the banks after the New York Times editorial board said that he should stay firm in not supporting a deal that would largely absolve banks.

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Filed by Jillian Berman  |