New York broadens mortgage probe

NEW YORK: New York has broadened its probe of the US mortgage industry , requesting information from at least five financial institutions that act as trustees for pools of mortgages, a person familiar with the matter said. New York Attorney General Eric Schneiderman's office requested documents from Deutsche Bank AG and Bank of New York Mellon Corp., which act as trustees for mortgagebond trusts, said the person. Between five and 10 trustees are being asked to provide information , said the person, who declined to be identified because the matter isn’t public.

New York law governs more than 80% of the trusts while Delaware controls the remainder, said the person. The two states, which have agreed to share information , are looking into whether the trusts are valid, the person said. The request from Schneiderman is part of a wider investigation by his office into mortgage practices by banks and the packaging and sale of loans to investors.

The attorney general's investigation has included a group of banks, such as Bank of America Corp. and JPMorgan Chase & Co., as well as bond insurers like MBIA Inc. Attorneys general from all 50 states and federal agencies are investigating the way banks handle mortgage loans and conduct foreclosures. The group is in settlement talks with the five largest mortgage servicers, including Charlotte, North Carolina-based Bank of America and Wells Fargo & Co.

James Freedland, a spokesman for Schneiderman, declined to comment, as did Jason Miller, a spokesman for Delaware Attorney General Beau Biden . John Gallagher, a spokesman for Frankfurt- based Deutsche Bank, and Kevin Heine, a spokesman for Bank of New York, declined comment. The New York Times reported the expansion of New York's probe earlier.