Government officials at both the federal and state levels expect to see an agreement soon on the penalty payments being negotiated with five big mortgage lenders over foreclosure practices. The governments are reportedly seeking a settlement in the $25 billion range from Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC), and Ally Financial Inc.
Negotiations were scheduled to conclude last Friday, but were extended to yesterday though no agreement has been officially announced yet. At least two states, California and Nevada, have indicated that they will not participate in the settlement. By one estimate California alone has suffered home value losses totaling more than $600 billion and the number could reach $1 trillion. A December estimate puts the percentage of Nevada homes that are underwater at 58%. Getting a piece of $25 billion won’t do much to help either state. Massachusetts has already filed a separate suit against the banks.
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