Bloomberg News

HUD, DOJ to Meet With States for Support on Foreclosure Deal

January 20, 2012

Jan. 18 (Bloomberg) -- U.S. Housing and Urban Development Secretary Shaun Donovan and a Justice Department official are set to meet with state attorneys general next week to rally support for a proposed settlement with banks over foreclosure practices, said a spokesman for Iowa Attorney General Tom Miller.

Materials about the proposed deal are being sent to all states, and Democratic attorneys general have been invited to meet on Monday with Miller, Donovan and Associate Attorney General Thomas Perrelli, said Geoff Greenwood, Miller’s spokesman.

State and federal officials have been negotiating a settlement with the five largest mortgage servicers, including Bank of America Corp. and JPMorgan Chase & Co., which would set requirements for conducting foreclosures and provide relief to homeowners. Miller, a Democrat, has been leading negotiations for the states.

Attorneys general from all 50 states announced in 2010 they were investigating bank foreclosure practices after disclosures that the companies were using faulty documents in seizing homes.

The meeting, planned for Chicago, comes after about a dozen state attorneys general met last week to discuss their mortgage probes and how they might work together during settlement talks, people familiar with the matter said last week. At Monday’s meeting, the federal and state officials will answer questions and discuss details of the potential deal in an effort to win support, Greenwood said.

New York, California

The group included New York Attorney General Eric Schneiderman, California Attorney General Kamala Harris and others who have said any deal shouldn’t protect banks from mortgage-related investigations that haven’t yet been resolved.

Harris and Nevada Attorney General Catherine Cortez Masto announced in December they were collaborating in their mortgage and foreclosure investigations. Schneiderman and Delaware Attorney General Beau Biden are also cooperating. In December, Massachusetts Attorney General Martha Coakley sued Charlotte, North Carolina-based Bank of America, New York-based JPMorgan, Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc., accusing them of conducting unlawful foreclosures and deceiving homeowners.

HUD spokesman Derrick L. Plummer declined to comment.

--With assistance from Lorraine Woellert in Washington. Editors: John Pickering

To contact the reporters on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net

To contact the editors responsible for this story: John Pickering at jpickering@bloomberg.net


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