Reports: AGs eyeing large foreclosure settlement

By Jessica M. Karmasek | Mar 9, 2011

WASHINGTON (Legal Newsline) - State attorneys general could be nearing a settlement with top U.S. banks over the foreclosure crisis, according to reports.

Bloomberg News, in a story published Tuesday, wrote that the attorneys general hoped to reach a deal within the next two months.

The attorneys general are in Washington, D.C., this week for the National Association of Attorneys General spring meeting. The theme, according to the NAAG website, is "State-Federal Cooperation in a Challenging Economy."

According to the Boston Herald, the attorneys general are using the meeting to talk about a possible deal with banks.

Last week, the state attorneys general and various federal agencies submitted a 27-page settlement proposal to the country's top-five mortgage servicers -- Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Ally Financial Inc., and Citigroup Inc.

According to the Boston newspaper, the reported $25 billion settlement would require banks to streamline mortgage modifications. Such modifications include cutting a homeowner's interest rate to make mortgages more affordable.

The nationwide mortgage foreclosure probe began in October with inquiries into so-called "robosigning" practices by several mortgage companies, and has since broadened into identifying and addressing additional alleged improper foreclosure practices.

Fifty state attorneys general, the U.S. Justice Department, the Treasury Department and the Consumer Financial Protection Bureau are working together on the investigation.

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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