Federal-State Meeting Planned to Rally for Foreclosure Accord

U.S. Housing and Urban Development Secretary Shaun Donovan and a Justice Department official are set to meet with state attorneys general next week to rally support for a proposed settlement with banks over foreclosure practices, said the Iowa Attorney General’s Office.

Materials about the proposed deal are being sent to all states, and Democratic attorneys general have been asked to meet on Jan. 23 with Donovan and Associate Attorney General Thomas Perrelli, said Geoff Greenwood, a spokesman for Iowa Attorney General Tom Miller.

State and federal officials have been negotiating a settlement with the five largest mortgage servicers, including Bank of America Corp. and JPMorgan Chase & Co., which would set requirements for conducting foreclosures and provide mortgage relief to homeowners. Miller, a Democrat, has been leading negotiations for the states.

The attorneys general from all 50 states announced in 2010 they were investigating bank foreclosure practices after disclosures that the companies were using faulty documents in seizing homes.

At the Jan. 23 meeting in Chicago, the federal and state officials will answer questions and discuss details of the potential deal in an effort to win support, Greenwood said. Republican attorneys general will separately discuss the proposed settlement by phone the same day with their Republican counterparts on the negotiating committee in addition to Donovan and Perrelli, Greenwood said.

The sessions come after about a dozen state attorneys general met last week to discuss their mortgage investigations and how they might work together, people familiar with the matter said at the time.

New York, California

The group included New York Attorney General Eric Schneiderman, California Attorney General Kamala Harris and others who have said any foreclosure settlement shouldn’t protect banks from mortgage-related investigations that haven’t yet been resolved.

Harris and Nevada Attorney General Catherine Cortez Masto announced in December they were collaborating in their mortgage and foreclosure investigations. Schneiderman and Delaware Attorney General Beau Biden are also cooperating. In December, Massachusetts Attorney General Martha Coakley sued Charlotte, North Carolina-based Bank of America, New York-based JPMorgan, Citigroup Inc. (C), Wells Fargo & Co. and Ally Financial Inc. (ALLY), accusing them of conducting unlawful foreclosures and deceiving homeowners.

Coakley said she believes there is “a likelihood that a settlement will be reached between some states and the banks,” according to a copy of remarks given to the Boston Chamber of Commerce.

“We will keep an open mind about whether the ultimate agreement makes sense for Massachusetts,” she said.

HUD spokesman Derrick L. Plummer declined to comment about the Jan. 23 meeting. A Justice Department spokesman couldn’t be reached for comment after normal business hours.

To contact the reporters on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net

To contact the editors responsible for this story: John Pickering at jpickering@bloomberg.net

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