New York AG under White House pressure on mortgage settlement

{mosads}Schneiderman and other attorneys general have been rankled over the proposed settlement, arguing its terms would prevent them from exploring and potentially litigating on related matters stemming from the housing crisis.

But Donovan told the publication that his primary focus was on getting help for homeowners sooner, and in turn helping to move forward a housing market that has consistently weighed on the economic recovery.

“Eric and I agree on a tremendous amount here,” he said in an interview. “The disagreement is around whether we should wait to settle and resolve the issues around the servicing practices for him — and potentially other AGs and other federal agencies — to complete investigations on the securitization side. He might argue that he has more leverage that way, but our view is we have the immediate opportunity to help a huge number of borrowers to stay in their homes, to help their neighborhoods and the housing market.”

Donovan’s interest in reaching a deal actually puts him in the same camp as the banks on the other side of the table. The Times reported that bank officials have actually discussed asking Donovan for help in winning over Schneiderman. Donovan said he had not spoken to any bank officials on that matter.

An early proposal of a settlement indicated that banks would have to pay about $20 billion to settle the matter, and those funds would in turn go to help homeowners modify their mortgages and stay in their homes.