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Originally published Monday, May 6, 2013 at 5:25 PM

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New York may sue Wells Fargo, BofA

The lawsuit will accuse both banks of repeatedly violating last year’s $26 billion mortgage settlement with 49 states and five big banks over foreclosure abuses.

The Associated Press

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New York’s attorney general Monday accused Wells Fargo and Bank of America of violating the terms of last year’s national mortgage settlement by failing to process hundreds of refinancing requests promptly.

Attorney General Eric Schneiderman has notified the national monitoring committee established to enforce the five-bank agreement. If the committee defers taking action, Schneiderman said he will sue for compliance.

Schneiderman said delays put homeowners further into debt from missed payments and penalties, pushing them closer to foreclosure.

Wells Fargo and Bank of America were not immediately available for comment.

Also Monday, Bank of America agreed to pay MBIA $1.7 billion to settle a dispute over faulty mortgage securities issued during the U.S. housing boom.

In exchange, the bond insurer will drop the litigation it brought against the mortgage lender Countrywide in 2008, according to a statement MBIA released Monday. Bank of America bought Countrywide in 2008.

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