The New York attorney general's office has requested information from three major U.S. banks about their mortgage operations, according to a source familiar with the matter.
New York Attorney General Eric Schneiderman has asked Bank of America Corp , Goldman Sachs Group Inc and Morgan Stanley for information on their mortgage securitization practices, the source said.
Schneiderman has also requested meetings with the banks over the next couple of weeks.
Spokesmen for Goldman Sachs and Morgan Stanley declined to comment. Bank of America did not immediately return a call seeking comment.
The probe, which was first reported by The New York Times, is the latest in an expanding series of investigations by state and federal agencies into banks' mortgage operations, which were at the heart of the worst global financial crisis since the Great Depression.
It's not surprising to see everyone wants a piece of the action while they can get it, said Adrian Cronje, chief investment officer at Atlanta-based Balentine, an investment advisory firm with $800 million in assets.
Last fall, nearly a dozen state and federal agencies began the largest ongoing investigation into banks' foreclosure practices after critics said the industry used robo-signers and other tactics to cut corners.
The allegations resulted in settlement talks between bank regulators, a coalition of 50 state attorneys general, and federal agencies that included the Department of Justice and the Securities and Exchange Commission.
Schneiderman is taking part in those talks, but he has recently expressed concern about any deal that would prevent additional investigations into mortgage practices at the banks.
Shares of Bank of America and Goldman were nearly unchanged in afternoon trading, while Morgan Stanley was up 0.7 percent.
A SERIES OF PROBES
In April, the U.S. Office of the Comptroller of the Currency, Office of Thrift Supervision and Federal Reserve announced they had settled with the largest U.S. banks, entering into consent orders that require the lenders to overhaul their foreclosure operations.
Talks with the coalition of 50 state attorneys general are continuing, with both sides discussing the size of any potential fine and whether mortgage lenders will write off principal on delinquent mortgages to aid borrowers.
A fine could cost the industry as much as $20 billion, although the banks have proposed paying $5 billion.
Other probes have emerged in recent weeks.
The SEC is looking at how banks bundled and sold toxic mortgages in collateralized debt obligation deals.
JPMorgan Chase & Co is in talks with the regulator to settle a probe into how it sold mortgage-backed bonds in 2007.
Meanwhile, the U.S. Department of Housing and Urban Development has accused five of the largest mortgage lenders -- BofA, Citigroup Inc , Wells Fargo & Co , JPMorgan and Ally Financial -- of defrauding the government in seeking reimbursements for mortgages on properties they improperly foreclosed upon, according to a story in the Huffington Post.
The audit, according to the report, claims the banks violated the False Claims Act, a Civil War-era law designed to protect the government from fraudulent bills.
The Justice Department is already suing Deutsche Bank for $1 billion for allegedly misleading the Federal Housing Administration about which loans qualified for the agency's insurance.
(Additional reporting by Lauren Tara LaCapra in New York; Editing by Lisa Von Ahn)