NY AG, tapped by Obama, sues large banks for foreclosure errors

{mosads}Financial institutions created MERS in 1995 as a way to electronically track the movement of mortgages through the financial system while avoiding local county recording fees, according to his office.

However, once the housing bubble burst and foreclosures began to occur at a rapid pace, it became difficult to track within MERS exactly where mortgages had ended up, resulting in a number of faulty foreclosure filings.

During his State of the Union address, Obama announced he was establishing a new unit within the executive branch devoted to investigating financial crimes. He also announced that Schneiderman would help run a subset of that unit specifically devoted to criminal activity in the housing market.

Schneiderman has become a favorite among liberal groups for his staunch opposition to a proposed settlement with banks over widespread problems emerging from the foreclosure crisis.

“We welcome this lawsuit,” said the left-leaning Campaign for America’s Future. “We applaud Mr. Schneiderman and his staff for their efforts on behalf of New York state residents and bank customers throughout the nation.”