The New York attorney general Monday announced he will sue Bankof America and Wells Fargo, claiming their mortgage servicing unitsare violating terms of the National Mortgage Settlement.

The banks, along with Ally Financial/GMAC, JP Morgan Chase andCitibank, reached the 2012 settlement deal with 49 state attorneysgeneral and the Department of Justice. The settlement included a$25 billion payout, mandated mortgage modifications and requiredspecific service standards.

Attorney General Eric Schneiderman said in a release his office has documented339 violations of standards – 210 violations by Wells Fargo, and129 by Bank of America – that require the banks to follow amodification processing timeline.

“The five mortgage servicers that signed the National MortgageSettlement are legally required to take specific, rigorous andenforceable steps to protect homeowners,” Schneiderman said in astatement.

“Wells Fargo and Bank of America have flagrantly violated thoseobligations, putting hundreds of homeowners across New York atgreater risk of foreclosure. I intend to use every tool availableto my office to hold these companies accountable under the terms ofthe National Mortgage Settlement,” he said.

The settlement agreement allows any party to bring anenforcement action in U.S. District Court for the District ofColumbia following a 21-day notice to a monitoring committee set upto enforce the agreement.

During the notification period, the committee may choose topursue the litigation on behalf of the party using the committee'sown authority under the settlement, or they may defer action.Following a deferral, the complaining party may pursue the claim ontheir own after waiting an additional 21 days.

On Friday, Schneiderman sent a letter to committee monitorJoseph Smith, and to each member of the Monitoring Committee,notifying them of his intention to bring a legal claim if thecommittee does not act. The letter included written complaintsagainst Bank of America and Wells Fargo, and what Schneiderman saidwas a significant amount of backup documentation demonstrating theseverity of the violations.

He said he intends to ask the court to impose injunctive reliefand to require strict compliance under the settlement.

“It is beyond frustrating,” Megan Faux, acting director of LegalServices NYC Brooklyn, said in Schneiderman's release. “We havemany clients who are at risk of losing their homes to foreclosuresimply because Wells Fargo failed to properly review complete loanmodification packages sitting in their office for months.

“Accountability to the servicing standards is essential toensuring homeowners have a fair opportunity to negotiate anaffordable mortgage and ending the housing crisis.”