Nevada Joins States Balking at Bank Releases in Foreclosure Practices Deal

A possible settlement of a 50-state probe of foreclosure practices drew more state scrutiny as Nevada’s attorney general joined three other states in voicing concern about a deal that protects banks from continuing mortgage investigations.

Nevada Attorney General Catherine Cortez Masto, whose office sued Bank of America Corp. (BAC) and is conducting civil and criminal foreclosure probes, said she will be “very cautious” about agreeing to a settlement that hinders those inquiries.

“If it’s impacting my ongoing litigation and any other future litigation or current investigation, I’m going to be cautious about whether to sign on or not,” Masto said yesterday in a phone interview.

State and federal officials are negotiating a settlement with the five largest mortgage servicers, including Charlotte, North Carolina-based Bank of America and New York-based JPMorgan Chase & Co. (JPM), over their servicing and foreclosure practices.

A person familiar with the matter said last month that banks want liability releases that cover other areas of their mortgage operations besides servicing, including the bundling of loans into securities.

Dan Frahm, a spokesman for Bank of America, said the bank shares Masto’s goal of helping homeowners.

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