Wednesday, December 14, 2011

Attorneys General Expect to Reach Settlement Before Christmas

The state attorneys general and the nation’s five largest mortgage servicers have been supposedly close to a settlement for quite some time. The latest estimate, according to the Des Moines Register is that they are likely to reach a settlement before Christmas.

The Des Moines Register attributes this information to Iowa Attorney General Tom Miller, head of the committee negotiating a settlement with the banks, who said the
settlement would release the banks from legal claims on past servicing and foreclosure practices but would not provide any release on claims regarding securitizations.

Miller reportedly said the deal would be complete by Christmas regardless of whether or not California participates.

California Attorney General Kamala Harris withdrew from settlement negotiations in October but can still rejoin.

Though the exact amount of the settlement is unknown, Bloomberg reported it will likely be in the range of $25 billion.

In addition, Miller told the Des Moines Register the settlement requires “substantial principal reductions” for underwater homeowners as well as a new set of servicing standards.

In other developments, Bloomberg reported Monday that former chairman of the FDIC, Sheila Bair, is being considered as a monitor for the settlement. As such, she would be charged with making sure banks comply with all aspects of the agreed upon settlement.

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