Monday, April 18, 2011

Foreclosure Probe Talks Said to Yield Some Agreements with Banks

Attorneys general negotiating a settlement of a 50-state investigation of foreclosure practices have reached agreements with lenders on some terms while failing so far to reach an accord on potential monetary payments by the banks, Bloomberg News reported today. The probe was triggered by claims of faulty foreclosure practices following the housing collapse which law enforcement officials said may violate state law. An accord remains out of reach because states want principal reductions for borrowers, which is more than banks agreed to in deals reached with U.S. regulators last week, said Allison Schoenthal, a lawyer at Hogan Lovells in New York. The 14 mortgage servicing companies who reached deals with U.S. regulators agreed to conduct a review of loans that went into foreclosure in 2009 and 2010, and improve their procedures for modifying loans and seizing homes. They also agreed to stop foreclosing on homes while negotiating lower mortgage payments for borrowers.

Bank of America and JPMorgan, also taking part in the regulator agreements were Wells Fargo & Co. (WFC), Citigroup Inc. (C), the GMAC unit of Ally Financial Inc., Aurora Bank FSB, EverBank Financial Corp., HSBC Holdings Plc, OneWest, MetLife Inc., PNC Financial Services Group Inc. (PNC), Sovereign Bank, SunTrust Banks Inc., and US Bancorp.

Bank of America, JPMorgan, San Francisco-based Wells Fargo, New York-based Citigroup and Detroit-based Ally are the five companies involved in the talks with the 50 states.