The New York Attorney General Eric Schneiderman has expanded his investigation into mortgage practices by big banks, Bloomberg reports.

Schneiderman's office is now looking JPMorgan Chase, UBS and Deutsche Bank. Those companies join Goldman Sachs, Morgan Stanley and Bank of America as banks under the microscope. Several bond insurance companies have also been subpoenaed, including Ambac, MBIA, Syncora and Assured Guaranty.

The California Attorney General Kamala Harris has also announced that her office is stepping up its investigative efforts. She has set up a task force of 25 attorneys and investigators who will work in three units: consumer enforcement, criminal enforcement and corporate fraud. The initial probe will look at mortgage origination, MBS marketing and false claims made to the state about mortgages.

These moves by the states follow the Senate Permanent Subcommittee on Investigation's release of an exhaustive report, along with a public reprimand and recommendation that the DoJ take a closer look.

Some might be tempted to argue that these states are merely piggybacking the report, which purports to lay out in detail the dubious sales and marketing practices those firms engaged in. We may see other states jump on.

This could well amount to an easy win, as remedies that have previously been agreed via consent decrees with federal regulators will likely be good enough for the states that pursue their own course on these issues. Recall that states collectively are also seeking a deal with banks. That effort seems to have bogged down after a deal seemed likely just a month ago.  

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