Attorney Generals clash over proposed mortgage settlement

March 15, 2011 01:54PM

State attorneys general are butting heads over a proposed settlement with loan servicers over their faulty foreclosure practices, according to HousingWire. The proposal is the result of an investigation launched in October into some of the nation’s largest mortgage lenders after a scandal revealed widespread errors in foreclosure documentation. But it appears there’s still quite a bit of negotiating to do. According to a spokesperson for Iowa Attorney General Tom Miller, “we haven’t even begun face-to-face discussions with the banks yet.” Meanwhile, a spokesperson for Utah Attorney General Mark Shurtleff said he hasn’t even seen the settlement, and Scott Pruitt, the attorney general from Oklahoma, has openly declared that he is against the idea of forcing servicers into principal write-downs. Virginia Attorney General Kenneth Cuccinelli has said at least a dozen states, including Virginia, oppose the deal. Each attorney general would have to sign off on the settlement in order for banks to be subject to the new regulations in their individual states.[HousingWire]