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The speech comes as a potential mortgage settlement approaches, and the new consumer bureau emerges as a top campaign issue.
January 23
The state attorney general leading settlement talks with the country's top mortgage servicers batted down speculation Monday that a deal had been reached.
"We have not yet reached an agreement with the nation's five largest servicers, and we won't reach a settlement any time this week," Iowa Attorney General Tom Miller said in a statement late Monday.
Some news reports suggested that a final deal had been sent to the states for review, and that President Obama could announce a deal at his State of the Union address Tuesday night.
But Miller said there are "terms we must still resolve," although he provided no indication about which details were still on the table. Both Democratic and state attorneys general were meeting with federal officials — including Housing and Urban Development Secretary Shaun Donovan — in Chicago Monday to discuss the still-unresolved terms.
Miller's statement came amid some signals that the parties involved in the talks — intended to provide remediation for poor mortgage practices and address servicing flaws — were close to finishing their work. Just last week, Donovan indicated a deal was imminent.
"We're very close to a settlement that would both fix the servicing problems, but also help over a million families around the country stay in their homes and get help," Donovan said Wednesday at a meeting of the U.S. Conference of Mayors, according to a Reuters report.
Settlement talks have reportedly focused on requiring the largest mortgage servicers to commit somewhere between $17 and $25 billion to help borrowers. Donovan said that about one million homeowners would get principal reductions under the proposed settlement terms.
But speculation about a possible deal reached a fever pitch over the weekend amid reports that Obama would address the settlement progress, and possibly even announce a deal, during his State of the Union address.
The negotiations, which focus on allegations of robo-signing and other servicer misconduct, have involved the five largest mortgage servicers — Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial. But federal officials began contacting other large servicers last month about being included in the settlement, two of which — PNC and U.S. Bancorp — disclosed last week that they had set aside funds relating to the ongoing servicer negotiations.
Meanwhile, housing advocates have stepped up their efforts to pressure the administration to reject any proposal that is too weak on the banks.
"The president needs to announce, clearly and deliberately, that the federal authorities will work with the relevant state AGs in a large-scale and comprehensive investigation that covers all corners of the mortgage industry — including the sale of securities, as well as lending practices," Simon Johnson, the Ronald A. Kurtz professor of entrepreneurship at the Massachusetts Institute of Technology, wrote in an
Some Democratic lawmakers, led by Ohio Sen. Sherrod Brown, are pushing for a full investigation into mortgage securities practices. They have urged the government negotiators not to allow servicers to pay a portion of the proposed settlement amount by writing down the value of mortgage-backed securities.
