AGs, banks to begin negotiations in robo-signing settlement for homeowners
Iowa Attorney General Tom Miller told more than 200 homeowners and consumer advocates in a meeting Tuesday that the investigation into foreclosure practices at major lenders is drawing to a close, and that negotiations will begin soon.
Major lenders froze foreclosures in October when employees were found to be signing affidavits en masse and without a proper review of the files as required by law in some sates. Miller and the other 50 state AGs along with seven federal regulators launched an investigation into what is now known as the robo-signing scandal.
In December, Miller met with homeowners for the first time, revealing that a possible settlement with the banks could result in payouts to victims, requirements to write down the principal of the loan and even criminal charges for executives.
But in the January meeting, Miller avoided revealing any details of what the settlement could possibly hold, according to a transcript of the meeting Miller's office released to HousingWire.
"Since we’re really getting close to negotiations, I’m not going to talk about, I don’t feel I should talk about, what’s going to be in the agreement, what isn’t going to be in the agreement," Miller told homeowners. "That’s something that we have to hammer out with the Justice Department and the federal people, and with the banks in a negotiating session."
The lack of details is starting to cause some concern among activists. The Iowa Citizens for Community Improvement, which organized the meeting, released a statement Wednesday expressing concern that Miller may be backing down off previous claims.
"Tuesday’s meeting felt a lot different than the meeting in December," Iowa CCI Director Hugh Espey said. "In our first meeting with AG Miller we felt like we had a champion that was ready to go toe-to-toe with the big banks. This time we left wondering if the big banks had knocked the wind out of our state's top law enforcer."
At the December meeting, Miller said he supported criminal prosecutions for banking executives as a possible outcome from a partnership between his office and the U.S. Attorney for the Southern District of Iowa. The 50-state AG investigation is a civil one.
Still, homeowners pressed Miller on the issue of possible jail time.
"Attorney General Tom Miller, will we put people in jail?" one homeowner asked, according to the transcript.
"I’m just not going to go into where we’re going to go at this point," Miller replied. "I’m going to leave that to the negotiations and the investigation and the work that we can do. So thank you again and we’ll be talking again, I’m sure. And I hope and trust we’re going to have a good agreement."
Write to Jon Prior.
Follow him on Twitter: @JonAPrior
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