Schneiderman says the settlement, which will net $136 million dollars to underwater mortgage holders in New York, provides funds for homeowners to hire attorneys. It also preserves the right to pursue criminal prosecutions of the banks, including a lawsuit already filed by the AG against MERS, an electronic mortgage company that he says was used to evade local mortgage recording laws, and in some cases, he charges, create false documents used to foreclose on homeowners.

Schneiderman says as co-chair of a task force set up by President Obama, he's begun probing "pre- (market) crash conduct" in the financial industry, including the bundling of mortgage securities, for possible fraud.

"Markets are supposed to be football game, not a street fight," said Schneiderman. "There are rules, there are lines."

The Attorney General says the national settlement is just "one step on a long road", and he hopes a bigger pay off to wronged homeowners will come in the future.