A spokesman for Iowa Attorney General Tom Miller, who is heading up the 50-state investigation of the foreclosure crisis and mortgage lender practices, said that a general compensation fund is being considered as a facet of any possible settlement.
“That is one of the many options being considered,” said Geoff Greenwood, Miller’s spokesman, in an interview. “There are no details that have been hashed out. Any characterization of it as a done deal is just inaccurate.”
The 50-state coordinated inquiry is investigating whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures. The probe, announced Oct. 13, came after JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC mortgage unit said they would stop repossessions in 23 states where courts supervise home seizures and Bank of America Corp. froze foreclosures nationwide.
The Washington Post reported earlier that the states and banks are in talks to establish a fund that would compensate people who lost their homes through faulty foreclosures.
“It simply has been raised as part of the discussion,” Greenwood said today.
The attorneys general investigation is on “a fast track” and any resolution might involve multiple settlements, Miller told Bloomberg last week. A global settlement of the task force investigation is unlikely, Miller said. “It would be one bank at a time.”
© Copyright 2013 Bloomberg News. All rights reserved.