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Holdout states nearing deal
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THE ASSOCIATED PRESS
WASHINGTON -- Nevada, California and New York, the key holdouts in a long-awaited settlement over foreclosure abuses, moved closer Monday to backing a deal that would force the five largest mortgage lenders to reduce loans for about 1 million households.
But those states, along with a handful of others, had not joined the settlement by a Monday deadline set by the nation's state attorneys general. And a deal might not be finalized for days.
"My office is continuing to review the intricate draft settlement terms and advocating for improvements to address Nevada's needs," said state Attorney General Catherine Cortez Masto in a statement. "Receipt of important state specific information is necessary to make our determination and my office is still in discussions regarding that information."
California still has "significant sticking points," but they may be settled in the coming days, said officials with direct knowledge of the negotiations. That represents progress from a few weeks ago, when California Attorney General Kamala Harris called the proposed settlement "inadequate."
The officials spoke on condition of anonymity because they weren't authorized to discuss the settlement publicly.
"I'm less concerned with the time line than the details," Harris said in a statement Monday.
Negotiators were working well into Monday night to see if they could persuade more states to join the settlement, an official said. There is growing optimism that California, New York, Delaware, Nevada and a few others will eventually sign on.
Homeowners in states that opt out of the deal wouldn't share in the settlement money. The money available to homeowners could run as high as $25 billion if all states approve the deal.
The reduced loans would benefit homeowners who are behind on their payments and owe more than their homes are worth. The lenders would also send checks for about $2,000 to hundreds of thousands of people who lost homes to foreclosure.
The five lenders -- Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial -- have already agreed to the settlement. In settling the charges, the states would agree not to pursue further investigations against the banks in civil court. The deal would not protect the banks from criminal investigations.
California's backing is particularly crucial. It was among the states hardest hit by the foreclosure crisis. And it has the most residents "underwater": They owe more on their loan than their home is worth. Without California's participation, the money available to homeowners nationally would be about $19 billion rather than $25 billion.
Las Vegas Review-Journal writer Chris Sieroty contributed to this report.
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What will be interesting is how they deternine who qualifies for the the loan reductions. It makes sense to prevent further displacement of homeowners/families who can afford to pay for their mortgage at current values with current interest rates. This would prevent futher distress to our current real estate market. There is no solution that will make all sides happy, but the house will have to be sold either way. So, if the homeowner qualifies for this new program, why not? Attempting to determine the financial consequences of this program to the tax payer is not easy since there is so much waste. At least some of the wast will go to doing good for hard working families. I believe homeowners who pay on time but are upside down should be on top of the list of those qualified.
Dems vote buying scheme, middle class honest responsible tax payer money. Bummer is ghetto rich. gave a way $1/2 bill to Fisker auto bout to go belly up.
settlement=bribe.....what's funny is, it's our money we GAVE them for TARP and the money we GIVE them for bank fees....well, I guess we can get back to the business of taking people's homes and selling them to investors! Hey Blonde Bimbo Realtor, I'm ready to go look at houses now, are you free this afternoon?