The investigation by 50 states' attorneys general into banks' foreclosure practices is on "a fast track," and any resolution might involve multiple settlements, Iowa Attorney General Tom Miller said.
"We'd like to resolve this sooner rather than later," Miller, who is leading the attorneys general task force, said in an interview. "We want to move quickly if we can but not so quickly that we don't do it right."
A global settlement of the task force investigation is unlikely, said Miller, 66, who also leads a separate foreclosure prevention group of state attorneys general. "It would be one bank at a time," he said.
Miller, who was first elected attorney general in 1978 and whose successes include $809 million from two settlements of mortgage lawsuits, did not speculate on when or how this investigation might be resolved.
All 50 states on Oct. 13 announced the coordinated inquiry into whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures. The probe 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.
At least 19 states, including Iowa and Texas, are doing separate investigations to determine whether state laws were broken. Some began investigating months before the coordinated nationwide probe was announced.
States have asked lenders to halt foreclosures, requested documents and sought better home loan modification procedures. Ohio's attorney general sued, accusing Ally Financial of consumer fraud.
Some lenders have acknowledged that employees may have completed court affidavits without confirming their accuracy. In December, a GMAC employee said in a deposition in a foreclosure case in West Palm Beach, Fla., that his team of 13 people signed about 10,000 documents a month without verifying the accuracy of the information in them.
"One bank at a time is logical," said Bernard Nash, a lawyer at Dickstein Shapiro LLP in Washington and head of the firm's practice group that represents corporations in dealings with state legal officials. "Everyone has their own interest, their own judgment on what a good deal is."
Initial settlements with individual banks may be less than comprehensive, resolving one or some issues at a time, said Nash, who is not involved in the foreclosure matter. "The issues they have to come to grips with are so complicated, this might require piecemeal settlements."
The attorneys general and their deputies on the 50-state task force have begun talking to the banks, Miller said. They have had one face-to-face meeting with a bank, he said. He declined to name the bank.
Current foreclosure problems go deeper than "robo-signing" allegations and predate the recent disclosures, Miller said. "We've been concerned about this for three and a half years."
An agreement resolving the 50-state probe may force servicers to commit more resources, he said. Such an agreement would require that "they would fully fund this."
Improved loan modification procedures, including additional modifications, might also be part of any agreement, he said.