Even within the 14-member “executive committee” of attorneys general who are leading the 50-state coalition, some have very different visions of what exactly a settlement should look like.
Florida’s Pam Bondi, for instance, has joined a handful of other Republican attorneys general in arguing against forcing banks to lower loan balances for troubled homeowners, a controversial practice known as principal reduction.
New York’s Democratic attorney general, Eric Schneiderman, meanwhile, has joined other states in pushing for stiff penalties for the firms involved, which include Bank of America and Wells Fargo. He also has insisted that any settlement should not let banks off the hook from the threat of future lawsuits.
The disparate views from some of the country’s largest, most influential and most foreclosure-plagued states means that Iowa Attorney General Tom Miller, a Democrat leading the negotiations alongside federal officials, must walk a delicate line if he hopes to arrive at a settlement that his peers can support, that banks cans live with and that struggling homeowners (and voters) view as meaningful.
“I’m still confident. I think there’s a settlement there that everybody can agree to,” Miller said in an interview Tuesday, though he added: “There are still some major obstacles between here and there. Something like this can always get off track, but I still think we can come to a resolution.”
Nine months after widespread problems with foreclosures caused a national uproar, that hasn’t proved easy or fast.
A handful of crucial states, including California, Illinois and New York, have undertaken their own investigations into mortgage industry practices, subpoenaing information about business practices and seeking meetings with executives about such things as securitization to faulty court affidavits. Other officials, such as in Oklahoma, have threatened to pursue their own settlements with mortgage servicers.
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