A Handful of Attorneys General Object to Proposed Bank Settlement

Several state attorneys general are voicing objections to the proposed settlement with the nation's top mortgage servicers.

Connecticut Attorney General George Jepsen has requested meetings with four of the nation's top lenders to discuss their mortgage servicing practices.

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Jepsen sent letters to Wells Fargo, JPMorgan Chase, Citigroup, and Ally Financial Inc., stating concerns resulting from complaints consumers have made to his office, the state Department of Banking and the Connecticut Fair Housing Center, according to ""_Bloomberg._"":http://www.bloomberg.com/news/2011-07-20/connecticut-attorney-general-calls-banks-to-meet-over-mortgage-servicing.html

Each of Jepsen’s letters express appreciation for the efforts each bank has made thus far but also expresses concern that the four banks are “failing to devote adequate resources to default servicing of residential loans in Connecticut.”

He asks for each bank’s assurance that it is “prepared to effectively (a) implement the new servicing standards that are taking shape and (b) handle the inevitable

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increase in borrower loss mitigation requests that will occur once it rectifies its document execution issues and fully resumes its Connecticut foreclosures.”

He expresses interest in learning more about each bank’s outreach efforts in Connecticut.

Jepsen's letters came while a coalition of the 50 states' attorneys general is still in negotiations with the four companies and Bank of America.

The current settlement being considered would require the top five banks to pay about $25 billion and abide by new foreclosure rules, while offering them immunity from any civil lawsuits brought forth by individual states, the Justice Department, and HUD.

Some attorneys general, including Beau Biden of Delaware, Eric Schneiderman of New York, and Martha Coakley of Massachusetts, object to the immunity, according to Bloomberg.

The three attorneys general each have launched their own investigations into the banks' foreclosure actions, and the clause would eliminate their investigations and possible legal actions.

Coakley's investigation focuses on whether the use of the Mortgage Electronic Registration System (MERS) violates Massachusetts property-records laws.

""We have made clear that Massachusetts will not sign on to any global agreement with the banks if it includes a comprehensive liability release regarding securitization and the MERS conduct,"" Coakley wrote in a letter to the state register of deeds, according to the ""_Boston Herald_"":http://www.bostonherald.com/business/real_estate/view/2011_0725mass_ag_coakley_launches_probe_of_foreclosure_mess/srvc=home&position=also. ""We strongly believe that these investigations must continue and responsible parties must be held accountable in order to fully protect homeowners and return to a healthy economy.""