States working toward separate foreclosure resolutions

Miller said the group has met with representatives from the five of the largest banks and have followed up since. 

The attorneys general were first looking into problems with “robo-signers” who would clear hundreds of foreclosure documents a day without verifying their contents. Miller said they also are looking into other mortgage practices. 

The group isn’t pursuing a criminal investigation, Miller said. “Our focus is to reform the servicing process and that’s inherently civil, not criminal” he said.

Part of the resolution with the banks could involve improving the loan modification process, barring foreclosures during the the loan modification process and creating a general fund to repay homeowners who may have wrongfully lost their homes because of paperwork errors or other mistakes. 

The Obama administration and housing sector analysts have called for the banks to quickly move along with their investigations over concerns that the halt of foreclosures could further depress the struggling market. 

Banks have been trying to mitigate any negative effects of the moratorium on the sluggish housing market by slowly speeding up the process again as they continue their investigations into whether foreclosures were properly handled.