Massachusetts on Thursday sued the nation's five largest residential servicers, alleging their foreclosure practices were unlawful and deceptive.
The suit could complicate negotiations with the 50 state attorneys general who had been negotiating with top ranked firms to settle allegations that they engaged in improper foreclosure paperwork, including robosignings.
The office of Massachusetts Attorney General Martha Coakley said in a statement that the lawsuit "seeks accountability for the banks' unlawful and deceptive conduct in the foreclosure process" and comes after more than a year of negotiations.
The five sued include Bank of America, Wells Fargo, JPMorgan Chase, Citigroup, and the government-owned Ally Financial. The firms rank one through five, respectively, in servicing market share, according to ASR sister publication National Mortgage News and the Quarterly Data Report.
The state also names the Mortgage Electronic Registration System or MERS, the system that helped the banks complete foreclosures.
At press time the servicers had not yet commented on the action.