Attorneys General Say Foreclosure Terms May Cause ‘Moral Hazard’
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A plan to resolve a nationwide probe of foreclosure and mortgage-servicing practices is being opposed by four more Republican state attorneys general, who say the terms of a deal may foster a “moral hazard.”
In a letter to Iowa Attorney General Tom Miller, a Democrat who has taken the lead in the investigation, the officials objected to new documentation requirements and principal reductions outlined in the proposed settlement submitted to the country’s top mortgage-servicing companies this month.