States said to be weighing $25-billion settlement with big banks
latimes.com
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States said to be weighing $25-billion settlement with big banks
The settlement is said to overhaul foreclosure and mortgage servicing practices. No deal has been officially reached among the states, federal agencies and the five largest mortgage servicers.
By Alejandro Lazo and Jim Puzzanghera, Los Angeles Times
January 24, 2012
Reporting from Los Angeles and Washington—State attorneys general have received drafts of a $25-billion settlement with the nation’s biggest banks that would overhaul foreclosure and mortgage servicing practices, according to two people familiar with the negotiations who aren’t authorized to speak publicly.
“Attorney General Harris has consistently and repeatedly expressed concern about protecting her ability to investigate wrongdoing in the mortgage arena, and that remains a key lens through which she will evaluate any proposals,” Shum Preston, a spokesman for Harris, said in a statement.
Officials negotiating on behalf of the state attorneys general met Monday with federal officials in Chicago to discuss the progress of the settlement talks.
Liberal activists and some lawmakers have criticized the ongoing settlement talks, arguing that the Obama administration should launch a broad investigation into the mortgage practices of big banks and push for a settlement that is tougher on the banks.
“In a world of Occupy Wall Street, activists across this country are going to be looking at this deal very closely,” said Bob Borosage, co-director of Campaign for America’s Future. He said there should be no “sweetheart deal” with major banks and said a $25-billion agreement would be just a “slap on the wrist.”
Sen. Sherrod Brown (D-Ohio) said the mortgage servicing problems were “part of a long-standing ugly pattern of homeowner abuse” by large banks that warranted a thorough investigation and prosecutions.
