RISMEDIA, April 4, 2011—(MCT)—Talks to settle state and federal investigations into botched foreclosure paperwork will be going on for a long time, government officials note after holding their first face-to-face meeting with top bank executives.
“They cautioned we are looking at months, not weeks or days,” says Jessica Smith, a Justice Department spokeswoman
Representatives of the five largest mortgage servicers—Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc.—met with government officials in Washington last week.
They discussed a settlement of investigations into problems in the foreclosure process, including bank employees signing documents without reading or understanding them, a practice called robo-signing.
Iowa Attorney General Tom Miller, who is leading the negotiations for the states, says that the session was a good first meeting but that no agreement was imminent. Attorneys general of all 50 states and representatives of seven federal agencies are investigating the foreclosure troubles.
The two sides have exchanged draft proposals covering new guidelines for foreclosures and mortgage servicing. Banks could be forced to pay as much as $25 billion in a settlement and might be required to allow homeowners to sell their houses for less than what is owed on their mortgages.
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