JPMorgan Chase (JPM) CEO Jamie Dimon said talks between the largest mortgage servicers and the attorneys general were still mired in negotiations for future liabilities. The multistate investigation launched in October 2010 when questionable foreclosure practices came to light at many of the nation's largest mortgage servicers. Federal regulators and the banks agreed to consent orders earlier in 2011 to begin installing new checks and guidelines on how troubled loans are treated. But the 50 state AGs have seen their numbers decline as Republicans claim the investigation already steps beyond their jurisdiction and a growing number of Democrats say the current proposals free the banks up from too much liability in the future. "The AG case continues to be bogged down," Dimon said in an earnings call with investors Thursday. The Iowa AGs office told HousingWire earlier in the week that although the talks were not imminent, they were making some progress. Chase earnings dropped more than 3% from last year on continued repurchase and warranty claims and lower production in its mortgage department. Litigation expense, however, appears to be creeping downward. This expense, particularly, for mortgage-related matters totaled $1 billion, down from $1.3 billion in the previous quarter and $1.5 billion at the end of last year. When asked during the call about the bank's and the industry's still deteriorating reputation – given the recent protests and regulatory crackdowns – Dimon said many of the issues within the industry were overblown. "A lot of bad actors are gone," Dimon said. "If you talk to most clients, most of our clients like us - even our mortgage clients. But we have issues, and we should be responsive to them, but if you travel around and you spoke to clients, we're trying the best we can. It's hard to make up for it and change the image." Write to Jon Prior. Follow him on Twitter @JonAPrior.