[[Update 1: Adds comments from the banks.]] Massachusetts Attorney General Martha Coakley sued five major banks and the Mortgage Electronic Registration Systems over allegedly unlawful and deceptive foreclosure practices. The suit was filed against Bank of America (BAC), Wells Fargo (WFC), JPMorgan Chase (JPM), Citigroup (C), and Ally Financial (GJM). In October 2010, many banks were found to be signing foreclosure affidavits en masse and without the proper review of the loan documents required under state law. A multistate AG investigation was soon launched, but more than a year later the talks, which could include a $20 billion settlement figure, continue to linger. Several AGs, including New York and California split from the negotiation to pursue their own claims. The lawsuit from Coakley Thursday is the first to arise from the robo-signing scandal, but it will not be limited to just paperwork problems. “The AG’s lawsuit seeks accountability for the banks’ unlawful and deceptive conduct in the foreclosure process, including unlawful foreclosures, false documentation and robo-signing, MERS and deceptive practices related to loan modifications,” Coakley’s office said. Coakley will hold a press conference Thursday afternoon to discuss the details of the suit. Iowa AG Tom Miller, who heads up the multi-state negotiations, put out a statement Thursday, saying Coakley is still open to joining the settlement. “Attorney General Coakley informed me of her decision to file lawsuits against the banks,” Miller said. “She also indicated that she’ll evaluate the joint state-federal settlement we’re negotiating, which we hope to reach soon. Attorney General Coakley indicates that she is open to joining our settlement effort if the terms adequately address the needs of the people of Massachusetts. We’re optimistic that we’ll settle on terms that will be in the interests of Massachusetts.” A MERS spokesperson said the company is confident its system, which was formed by the largest banks to track the assignment of the mortgage, are in compliance with state law. “In fact, in the last two years the Massachusetts Land Court has acknowledged the MERS System and approved of precisely the type of conduct relating to registered land that the complaint now challenges,” the spokesperson said. A spokesman for Citi said it has been cooperating with Coakley during her investigation. “We have just received the suit and have not yet had time to review it,” the spokesman said. “We believe we have operated appropriately, in compliance with existing laws, and will defend our actions vigorously.” Chase put out a statement Thursday, expressing frustration with the timing of the lawsuit. “We are disappointed that Massachusetts would take this action now when negotiations are ongoing with the attorneys general and the federal government on a broader settlement that could bring immediate relief to Massachusetts borrowers rather than years of contested legal proceedings.” Wells Fargo claimed in a statement that the suit would do little to help the people of Massachusetts or the recovery of the housing market there. “While we will vigorously defend ourselves in the Massachusetts case, Wells Fargo will continue our work with state and federal authorities to develop housing remedies across the country,” Wells said. “Most importantly, we will continue to work with our customers to help them maintain homeownership whenever possible.” Bank of America said working together for a resolution makes more sense than suing. “We continue to believe that collaborative resolution rather than continued litigation will most quickly heal the housing market and help drive economic recovery,” said Lawrence Grayson, a BofA spokesman. “We are working closely with the DOJ state attys general and other agencies to reach a fair and comprehensive solution to these critical issues.” The banks have repeatedly denied the problems resulted in wrongful foreclosures. Ally Financial CEO Michael Carpenter said he was ready to take the AGs to court if the settlement proposal didn’t fit what he thought the bank was responsible for. “It is very disappointing that the Attorney General has elected not to continue a more constructive path that could help borrowers in the state, but rather has chosen to use the court process,” Ally said in a statement Thursday. “GMAC Mortgage believes it has strong legal and factual defenses against these claims and will vigorously defend its position in court. The company is confident in its ability to prevail.” The 12 major mortgage servicers signed consent orders with federal regulators in April forcing a review of 4.5 million loan files along with new servicing requirements. A report released in November showed each of the servicers installed single points of contact for troubled borrowers and put oversight in place to ensure no foreclosures occur while a borrower is being considered for a modification. Write to Jon Prior. Follow him on Twitter @JonAPrior.