New York Attorney General Eric Schneiderman announced at a press conference this afternoon that his office will be suing Bank of America Corp (BOA) and Wells Fargo and Co for violating the $25 billion settlement they agreed to one year ago.  Reports are that the suit could be filed within the next two months.

Schneider said his office has documented 339 violations of standards established by the settlement that dictate the timeline for banks to process applications for mortgage modifications.  Wells Fargo has 210 alleged violations and BOA 129.

The National Mortgage Settlement involved three other banks in addition to Wells Fargo and BOA.  It settled claims and lawsuits with 49 state attorneys general and several federal regulatory agencies.  In addition to the cash settlement the banks agreed to cut mortgage debt amounts, restructure troubled loans, and meet new servicing standards.  Joseph Smith, former North Carolina Banking Commissioner who heads the settlement monitoring committee is expected to report within the next few weeks on progress made by the five servicers in meeting the settlement terms. .

Under the settlement any of the several parties can bring action against the banks after a 21 day notice to the monitoring committee.  Schneiderman said he has informed the committee of his intentions and the committee has the right to proceed on litigation of its own or defer to his suits.   

Schneiderman did not comment on whether the other three banks involved in the settlement, JPMorgan Chase, Citigroup, and Ally Financial, were performing under the lawsuit to New York's satisfaction.