Feb. 8 (Bloomberg) -- Bank of America Corp. is negotiating a settlement to resolve a consumer fraud lawsuit filed against the bank by Arizona’s attorney general, a person familiar with the matter said.
Arizona sued Bank of America in 2010 over its mortgage- servicing practices. The bank violated the state’s consumer fraud act and misled consumers who were seeking mortgage modifications, according to the attorney general’s office.
A settlement would clear the way for the state to join a proposed nationwide agreement with banks over foreclosure practices. Arizona is among a group of states that have yet to sign on to the deal, said the person, who didn’t want to be identified because the matter wasn’t public.
The foreclosure agreement with banks, which may amount to $25 billion, requires Arizona to resolve its claims against Bank of America if the state wants to sign on to the settlement, according to the person.
The state is in advanced talks with Bank of America and intends to join the multistate foreclosure accord if a settlement in the fraud case is reached, the person said.
Rick Simon, a Bank of America spokesman, didn’t immediately respond today to an e-mail seeking comment on talks with Arizona officials. Amy Rezzonico, a spokeswoman for Arizona Attorney General Tom Horne, couldn’t be reached for comment on possible settlement.
Nevada also has a lawsuit pending against the bank and must resolve its claims as a condition of the foreclosure settlement, the person said.
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