Bloomberg News

Nevada’s Masto Won’t Decide Today on Foreclosure Accord

February 07, 2012

(Updates with attorney general in second paragraph.)

Feb. 6 (Bloomberg) -- Nevada Attorney General Catherine Cortez Masto said she won’t decide by today’s deadline whether to join a nationwide settlement with banks over foreclosure practices.

Nevada is “continuing to review the intricate draft settlement terms and advocating for improvements to address Nevada’s needs” in the proposed nationwide settlement over bank foreclosure practices, Masto said in an e-mailed statement. Masto said in a Jan. 27 letter to state and federal officials involved in negotiating the accord that she needed answers to 38 questions to evaluate the deal.

“State-specific information is necessary to make our determination and my office is still in discussions regarding that information,” Masto said in the statement.

While attorneys general in some states have already announced their intention to sign the deal, said to be worth as much as $25 billion, others including California Attorney General Kamala Harris have yet to publicly commit in part due to terms that protect the banks from future litigation. Without Harris, the deal’s value will drop by several billion dollars, according to a person familiar with the matter.

‘Less Concerned’

“I’m less concerned with the timeline than the details,” Harris said in an e-mailed statement. “For the past 13 months we have been working for a resolution that brings real relief to the hardest-hit homeowners, is transparent about who benefits, and will ensure accountability. We are closer now than we’ve been before but we’re not there yet.”

Today’s deadline, extended by the parties from Feb. 3, comes almost 16 months after all 50 states announced they were investigating bank foreclosure practices following disclosures that faulty documents were being used to seize homes.

Officials from a group of state attorneys general offices and federal agencies, including the Justice Department, have since negotiated terms of a proposed settlement with the five largest mortgage servicers -- Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co., and Ally Financial Inc.

Masto, Harris

In December, Masto, who has criticized the proposed nationwide settlement as inadequate, joined Harris in announcing they would jointly investigate wrongdoing in mortgage loan origination, servicing and securitization, and will share litigation strategies, information and evidence.

Masto’s office sued Bank of America in December 2010 to undo an agreement over home-loan modifications tied to the bank’s Countrywide Financial unit, claiming the lender failed to meet its obligations. The case is being litigated in federal court in Reno.

Masto’s lawyers in a court filing have accused the bank of stalling tactics that they said “underscores the gamesmanship” the state faces.

Bank of America said in a court filing that it has engaged in an “aggressive, systematic, and unprecedented” collection and production of documents. Bank of America has been “exceedingly open” with Masto’s lawyers, according to the filing.

Commenting on the current status of the accord, Dan Frahm, a spokesman for the Charlotte, North Carolina-based bank, said “We’re interested in finding a path forward with a comprehensive settlement that benefits homeowners and communities.”

Mark Rodgers, a spokesman for New York-based Citigroup, declined to comment. Tom Goyda, a spokesman for San Francisco- based Wells Fargo, Tom Kelly, a spokesman at New York-based JPMorgan, and Gina Proia of Detroit-based Ally Financial also declined to comment.

The case is Nevada v. Bank of America Corp., 11-cv-00135, U.S. District Court for the District of Nevada (Reno).

--With assistance from David McLaughlin in New York. Editors: Peter Blumberg, Glenn Holdcraft

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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