BofA (BAC), Wells (WFC), JPMorgan (JPM), Citigroup (C), Ally (GJM) Enter Negotiations with States over Illegal Foreclosures

Although Iowa Attorney General Tom Miller, who has been leading a 50-state probe into alleged illegal foreclosure practices of big banks like Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Ally Financial (NYSE:GJM), said the state attorney generals have entered into negotiations with the top five banks, he didn't specifically name them.

The five giant banks, which account for 59 percent of the market, are in negotiations with the attorneys general and some federal agencies.

There have been reports the states are attempting to work out a $20 billion settlement with the banks, but Miller wouldn't confirm one way or the other whether that was true. An alternative to that, according to some unsubstantiated reports, is the banks may have to provide that amount via mortgage modifications to underwater homeowners.

Giving a nod to the possibility they could screw up the housing market, North Carolina Attorney General Roy Cooper said, "We realize the result we come to can have an impact on the housing market and hence the economy. That's why all of us at the table want it to be a positive impact."