(Updates with Miller’s statement in fourth paragraph.)
Jan. 23 (Bloomberg) -- Iowa Attorney General Tom Miller said a deal with the five biggest U.S. mortgage servicers to resolve a probe of foreclosure practices won’t be reached this week.
State and federal officials have been negotiating a settlement with the five largest mortgage servicers -- Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc. Representatives of Democratic attorney general offices met today at a Chicago hotel to discuss a proposed accord.
The deal with the banks would be worth about $25 billion, two people familiar with the matter said last week. That would drop to about $19 billion if California Attorney General Kamala Harris decides not to sign on, the people said.
“We have not yet reached an agreement with the nation’s five largest servicers, and we won’t reach a settlement any time this week,” Miller, who has been leading the negotiations for the states, said in a statement.
Banks would fund loan principal writedowns for homeowners and provide refinancing, the people said. The proposal also sets requirements for how to conduct home foreclosures. Delaware Attorney General Beau Biden, a Democrat, won’t sign on to the proposed foreclosure settlement as currently drafted, Deputy Attorney General Ian McConnel said in a phone interview today.
Today’s meeting in Chicago is an opportunity for officials at Democratic attorney general offices to ask questions before they are asked to decide whether to sign on. Housing and Urban Development Secretary Shaun Donovan, who is also attending, declined to comment during a break.
Republicans will discuss the accord during a conference call today, one of the people said.
Some state officials at the meeting have questioned how much monetary relief the agreement will provide to homeowners in their states, another person familiar with the matter said.
The 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.
--With assistance from Margaret Cronin Fisk in Southfield, Michigan. Editors: Andrew Dunn, Mary Romano
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