Attorneys general are likely to sue banks for failing to reach a settlement regarding foreclosure abuses. Five mega mortgage servicers of America pursuing talks with the attorneys general regarding foreclosure operation are likely to be facing legal suits if a settlement is not reached said two officials of states that have been participating in the talks. Lisa Madigan and Roy Cooper, the attorneys general of Illinois and North Carolina respectively, have threatened to sue the firms, if the negotiations break down; two of the companies are Bank of America and JPMorgan Chase.
Cooper said “If we don’t get an agreement, we’re prepared to go to court”. He was speaking at a conference in Chicago of the state attorneys general.
Both Madigan and Cooper are included in the attorneys general executive committee that together with officials representing other federal agencies are holding talks with the mortgage servicers. The officials of the state and federal governments are endeavouring to lay standards for the manner in which the banks service mortgage loans and proceed with foreclosure operations. They are also seeking monetary compensation for the wronged house owners.
Investigations by the attorneys general of all the fifty states started from last fall. In March this year there was a proposed settlement that gave the call for “a substantial portion” of monetary compensation from the financial entities to finance modification of loans – inclusive of reduction of principal.
The attorney general of Iowa, Tom Miller has been leading the talks. He told a gathering of house owner advocates that the officials are proceeding with the talks but he did not want to give any more details. He said, “We don’t want a settlement around the margins, around the edges. The settlement has to be fundamental, has to make some changes that are worth it, that are constructive”.
The banking group had made an offer of $5 billion but Madigan said at a recent press conference that the amount was insufficient. She said they were trying to wring out more from the banks because the harm they done by them ran into many billions; great injury had been done to the communities as well as to families. Later when asked about when the deal was likely to be finalized she replied that she was unsure. Referring to the possibility of bringing legal suits against the offenders she said if that was necessary they would do it and they had the resources to proceed along these lines.