Massachusetts Sues Several Banks for Foreclosure Disaster

Massachusetts Attorney General Martha Coakley removes her state from foreclosure talks and pursues her own lawsuit against five major banks.
| Tuesday, December 06, 2011

When it comes to the foreclosure crisis that was inevitably caused by banks acting unethically and engaging in everything from robo-signing to wrongful foreclosures, just about everyone in real estate has had enough. From military families wrongfully losing their homes to residents of multiple states fighting to stop foreclosure, everyone in the country is tired of banks only receiving minor punishments for the actions that have put many families on the streets.

One state has had enough.

Massachusetts has decided to file a lawsuit against several major lenders due to issues revolving around foreclosures. Specifically, Martha Coakley (the Massachusetts Attorney General) is filing a lawsuit against Bank of America, Wells Fargo, JP Morgan Chase, Citigroup and Ally Financial. Along with wrongful foreclosures and robo-signing, Coakley wants banks to be held accountable for providing false documentation as well as wrongful practices revolving around loan modification.

Coakley is among several attorneys general (including the attorneys general from California and New York) from across the nation that have removed their states from the foreclosure talks due to disapproval of the negotiations taking place. Coakley clearly thinks banks are getting off too easy for their actions (and sometimes inactions) that led to the current real estate disaster.

The Massachusetts Attorney General made it very clear from the beginning of the talks that she would refuse to sign any deal that did not hold the banks truly accountable for their actions. The current negotiation talks would remove banks from the possibility of having civil lawsuits brought up against them if the agreement is signed. Clearly, Coakley is unhappy with how the talks are progressing and has decided to take matters into her own hands in her attempt to hold banks truly accountable for the wrongful actions that have caused her state’s residence to suffer.

Although only these three states have pulled out of the negotiation talks, several other states are also discontent with the civil lawsuit protection that the current talks would provide the banks if an agreement was reached. Who knows; these states may pull away and file their own lawsuits soon if the talks do not adequately hold banks accountable for their unethical actions.

One thing is certain: Martha Coakley has definitely seen all she cares to see when it comes to the foreclosure negotiations and has decided to remove her state from the talks and pursue her own lawsuit against these five banks. Now all eyes are on the foreclosure talks to see if a deal is finally reached or if other states remove themselves from the discussion in an effort to pursue their own lawsuits.

In the end, the real estate market is still in distress and the foreclosure inventory remains incredibly high. To attorney generals like Coakley, these banks need to pay for their wrongful actions that led to the foreclosure crisis and she plans to do her part to ensure that these lenders receive more than a slap on the wrist. 

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