Recall that just a few months ago, people were hopeful that state attorneys general would quickly wrap up settlement talks with the largest consumer banks and mortgage servicers. The idea was that a quick deal would lead to a set of mortgage and foreclosure best practices and create some funds to help aggrieved customers, which would pave the way for banks to finally start working off their backlog of foreclosures.

Well, it hasn't happened that way. In fact, the states as a group still have not settled, and several states have gone out on their own in search of settlements. It is perhaps a reflection of the protracted stalemate that attorneys general from North Carolina and Illinois are now saying that they will sue the banks and servicers if a settlement is not struck soon. This comes amid news that the deadline for a deal has been pushed back yet again.

Recall that some federal agencies have already struck consent decrees with large banks, servicers, MERS and Lender Processing Services (LPS). It's unclear if the states will be able to add any meaningful remedial steps on top of what has already been agreed to. The biggest issue may be money. The banks have offered a settlement that would call for them to pay $5 billion, but some think that is not enough.

For more:
-here's the Bloomberg article

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