States' Deadline for Decision on Robo-Signing Settlement Gets Pushed

It will be at least three more days before the industry learns how many and which states have agreed to the robo-signing settlement that was proposed last week. The deadline for state attorneys general to opt in has been pushed from February 3 to February 6.

Geoff Greenwood, spokesperson for Iowa Attorney General Tom Miller, says at least one state requested an additional business day to come to a decision, so Miller moved the cut-off date to Monday. Miller is head of the negotiating committee for the states.
While terms of the current settlement proposal have not been disclosed, it’s expected that the agreement will include penalties against the nation’s five largest mortgage servicers in the range of $25 billion and will lay out procedural changes for foreclosure processing.
Should an agreement be reached, it would absolve Ally Financial, Bank of America, Citigroup, JPMorgan Chase,
and Wells Fargo of past documentation and affidavit errors in the states that choose to join the settlement and protect them from future litigation by those states.
Oregon Attorney General John Kroger issued a statement this week announcing that Oregon will sign on to the multi-state settlement.
“I am not confident we could get a better agreement on this limited set of issues if we litigated for several more years,” Kroger said.
He also noted that the release in the settlement is “narrowly drafted,” which would leave the door open for participating states to pursue their own investigations of mortgage securitization and other practices that they feel may have led to the housing crisis.
Kroger says the proposed settlement would give the state of Oregon an estimated $30 million, in addition to an estimated $100 to $200 million to assist underwater homeowners and borrowers facing foreclosure in the state.
According to Bloomberg, Connecticut Attorney General George Jepsen also supports the settlement agreement.
The one state that may prove to be the tipping point in what has been a year of negotiations between attorneys general and servicers is California. Its attorney general has already publicly rejected the settlement proposal, stating that the deal is “inadequate for California.”
Market observers say without California, the deal may be inadequate for the servicers.