US mortgage settlement talks face setbacks, again

* State AGs faced Monday deadline to join mortgage deal

* Many states say won’t comment about their participation

* Deal faces another setback after banks balk at NY suit

* California angling for more control over relief

By Aruna Viswanatha and Karen Freifeld

Feb 6 (Reuters) – A multi-state mortgage settlement in the works for more than a year will likely be pushed back again as dissident U.S. states continue to press specific concerns and ignore a Monday deadline to decide whether they will sign it.

States had been given two weeks to assess a proposed settlement, under which top U.S. banks would pay up to $25 billion in exchange for resolving civil government lawsuits about misconduct in servicing home loans and pursuing faulty foreclosures.

But on Monday, as a close-of-business deadline loomed, many states had not yet reached a decision.

Some states and activist groups have been concerned the proposed deal would release banks from too many claims and does not provide enough relief to homeowners.

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