The five largest servicers of residential mortgages — including Bank of America and Wells Fargo — may be the first to settle with 50 state attorneys general who are investigating foreclosure practices, according to combined press reports.
Quoting Iowa Attorney General Tom Miller, Bloomberg reported that the AG working group on foreclosures expects to reach five separate agreements with the five largest servicers. (AG Miller heads the multi-state probe.)
Early Tuesday morning Miller could not be reached for comment.
According to figures compiled by National Mortgage News and the Quarterly Data Report, the nation's top five servicers (BofA, Wells, Chase, CitiMortgage, and Residential Capital Corp.) control 64.25% of the nation's $9.8 trillion in housing debt, 10% of which is 30 days or more late.
Representatives of the five have been meeting with Miller. Bloomberg reported that it's likely the five will sign individual settlements with the AG group rather than a global agreement.
AGs have been investigating allegations that many servicers — not just the top five — have been cutting corners on their foreclosure paperwork by not following proper procedures and in some cases using "robo-signers" to move massive amounts of foreclosure filings through the courts.