States may have options for how to use any money from a nationwide foreclosure settlement with U.S. banks, including applying funds toward principal reductions for borrowers, Georgia Attorney General Sam Olens said.
Including those choices may broaden support for any deal among the attorneys general who oppose requiring banks to fund principal writedowns, Olens said in an interview. He estimated that as many as 20 of his colleagues oppose the reductions.
“While one AG may want to use it for principal writedowns, other AGs may use it for different methodologies to assist their constituents,” Olens said today at meeting of state attorneys general in Chicago.
Attorneys general and federal official are negotiating with the five largest mortgage servicers in the U.S., including Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM), to set standards for the way the banks service loans and conduct foreclosures. Attorneys general from all 50 states began investigating banks’procedures last year.
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