ETF News

Florida says more work needed in foreclosure talks

* Florida AG dismisses reports that a deal is imminent

* States, banks in talks over alleged foreclosure abuses

* New round of talks to be held in Washington on Thursday

MIAMI, Oct 12 (Reuters) - Florida’s attorney general dismissed media reports that a final settlement is imminent in multi-state negotiations over alleged foreclosure abuses by U.S. banks.

Florida Attorney General Pam Bondi also said states that have pulled out of the negotiations should return to bolster any deal. Federal, state and bank officials are expected to hold another round of negotiations in Washington on Thursday.

“I read this morning that we’re settling this tomorrow. I doubt that’s going to happen,” Bondi said, speaking on Wednesday during an event in Miami.

“We still have states that aren’t on board yet. We’re trying to bring in some people who left the table.”

Negotiations toward a settlement have been going on for months, with penalties on the banks of up to $20 billion being discussed. A settlement would free up a backlog of foreclosures weighing on housing markets and dragging on economic growth.

Banks, including Bank of America Corp , JPMorgan Chase & Co , Wells Fargo & Co and Citigroup Inc are seeking to maximize their legal immunity. Investor worries about banks’ financial liability have helped send bank shares falling this year.

Last month, the state of California pulled out of the negotiations, with the state’s attorney general saying the talks had failed to provide enough relief for homeowners and released the banks from too many legal claims.

New York abandoned the negotiations in August expressing similar concerns.

“The main thing I want to focus on is bringing everybody back to the table,” Bondi said. “That right now is the most important thing.

“Whether we agree or disagree, we all have to stay at the table or we’re never going to get anything done.”

The banks are accused of dealing with a deluge of mortgage defaults that began in 2008 by cutting legal corners and unlawfully rushing through foreclosure paperwork.

The claims include allegations of “robo-signing” in which lenders’ employees or outside contractors produced and signed reams of foreclosure documents without fully understanding their content.

A settlement with all 50 states and federal authorities could help the banks move beyond the legal fallout that has dogged them since the height of the financial crisis.

The talks have been bogged down by disagreement over the banks’ legal exposure.

Sources close to the negotiations have told Reuters a settlement is possible without all states signing on. Even if a state chooses not to sign on to a final deal, its homeowners could still benefit, the sources said.

Details over the size of any penalties and how that money would be divvied up have not yet been worked out, people familiar with the talks said.

“We’re doing our best to resolve this,” Bondi said.