As the clock ticks down on year-long negotiations on a sweeping mortgage relief settlement, the architects of the joint state-federal plan believe it would be better for homeowners to get a partial deal than nothing at all, according to sources close to the talks.
Facing a Monday deadline, attorneys general in all 50 states are weighing the terms of a proposed $25 billion settlement designed to force five big lenders to pick up the pace of rewriting mortgages for homeowners struggling to make their payments.
Several states, holding out for tougher terms, have threatened to derail the negotiations, which have included federal officials from the Departments of Justice, Treasury and Housing and Urban Development, along with the five biggest U.S. banks, including Bank of America, JP Mortgage Chase, Ally Financial (formerly GMAC), Citigroup, and Wells Fargo.
Though a deal could come as early as Monday night, ongoing talks with bankers could delay any final announcement until later this week, according to sources who asked not to be named because they weren't authorized to discuss the negotiations publicly.
For months, the holdout states -- including New York, California, Nevada, Delaware and Massachusetts -- have cast doubt on whether a deal could be reached. New York Attorney General Eric Schneiderman, who was dismissed from a negotiating committee in August for allegedly trying to undermine the deal, on Friday filed suit against three of the banks challenging their use of a mortgage registry that is critical to their foreclosure efforts.
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