* State AGs faced Monday deadline to join mortgage deal
* Many states say won’t comment about their participation
* Deal faces another setback after banks balk at NY suit
* California angling for more control over relief
By Aruna Viswanatha and Karen Freifeld
Feb 6 (Reuters) - A multi-state mortgage settlement in the works for more than a year will likely be pushed back again as dissident U.S. states continue to press specific concerns and ignore a Monday deadline to decide whether they will sign it.
States had been given two weeks to assess a proposed settlement, under which top U.S. banks would pay up to $25 billion in exchange for resolving civil government lawsuits about misconduct in servicing home loans and pursuing faulty foreclosures.
But on Monday, as a close-of-business deadline loomed, many states had not yet reached a decision.
Some states and activist groups have been concerned the proposed deal would release banks from too many claims and does not provide enough relief to homeowners.
California Attorney General Kamala Harris, whose state would see homeowners get some $6 billion to $8 billion if it participates, was not expected to issue any statement on Monday, a person familiar with the matter said.
On Friday, Harris told Reuters she was “less concerned with the timeline than the details” of the settlement.
A New York lawsuit filed on Friday against JPMorgan Chase , Bank of America and Wells Fargo has also become a stumbling block, according to a person briefed on the negotiations.
This person said on Monday that the banks are balking at the lawsuit from New York Attorney General Eric Schneiderman that accuses them of fraud in their use of the electronic mortgage registry MERS.
The lawsuit is based on claims that were expected to be resolved through the settlement.
The multi-state settlement talks are focusing on the three banks named in Schneiderman’s suit, as well as Citigroup and Ally Financial.
Schneiderman has been a key opponent of the proposed settlement.
However, Schneiderman said Jan. 27 that the liability releases in the draft settlement had become narrow enough so that a full investigation by a new mortgage crisis unit that he will help lead could move forward.
Jennifer Givner, press secretary for Schneiderman, declined to comment on Monday.
Other states continued to weigh the details until the last minute.
In a statement, Nevada Attorney General Catherine Masto said her office is continuing to review the settlement and is advocating for improvements to address Nevada-specific needs.
Masto sued Bank of America last year and accused it of violating an earlier agreement meant to resolve mortgage-related claims from its Countrywide unit, and lawyers for the office are in discussions about what impact the settlement will have on the lawsuit, people familiar with the matter said.
A spokeswoman for Attorney General Tom Horne of Arizona said on Monday afternoon that Horne was still evaluating the settlement and “may decide by the end of the day.”
A spokesman for the attorney general in Massachusetts, Martha Coakley, said her office would not have a comment on Monday.
Coakley separately sued the same banks in December and accused them of deceptive foreclosure practices, but she has not ruled out joining the multi-state settlement.
California’s Harris has expressed concern that relief provided in the settlement go to those “most distressed” in her state, and has pressed for some certainty that the relief is regionally proportionate, according to people familiar with California’s concerns.
Meanwhile, U.S. Housing and Urban Development Secretary Shaun Donovan has been pushing hard in recent weeks to close and sell the deal.
He spoke to left-leaning bloggers in a conference call over the weekend to convince them of the merits of the settlement.
Representatives of several other state attorneys general either declined to comment or did not respond to requests for comment.