Little was settled in the first round of foreclosure settlement talks as "the nation's top mortgage servicers met Wednesday in Washington with the attorneys general from five states as well as Obama administration officials, beginning negotiations in earnest over new rules for homeowners who are in default," according to an article in today's edition of The New York Times by David Streitfeld.

"The one thing everyone seemed to agree on was that an agreement was going to take time," the article said, adding that Iowa Attorney General Tom Miller, who is leading the effort from the states' side, said that "we have a long way to go" and Thomas J. Perrelli, associate United States attorney general, declared that "Obviously this is a very large set of issues, and it's going to take some time to work through."

"The quest to secure new foreclosure rules, which began last fall after the banks were shown to be breaking the rules as they pursued evictions," the article continued, "may be slow but it is playing out in public. When the effort was started, every attorney general signed on, but the coalition has begun to fracture. Several Republican attorney generals are accusing their colleagues of overreaching in their attempt to bring the banks under control, while at least one Democrat, Eric T. Schneiderman, the New York attorney general, has expressed concern that any deal would immunize the banks from future legal action. After Wednesday's meeting, Mr. Schneiderman said through a spokesman that he remained worried about 'providing broad amnesty to servicers.'"

The article said that Adam Levitin, a law professor at Georgetown University, said that "the banks' strategy is to run the clock," adding that "the chances of a settlement that meaningfully reforms mortgage servicing and makes the banks pay an appropriate price for illegal conduct are rapidly slipping away."

The article noted, however, that "government negotiators may receive some support from the imminent release of a report by banking regulators. The report, based on investigations conducted over the winter, is expected to establish what many households in default knew long ago: that banks cared little for the legal niceties governing foreclosure, exacerbating the troubles of millions at a particularly vulnerable point of their lives. In addition, the report is expected to show that bank employees were poorly trained, that they let law firms and other third party contractors run wild, and that they had little interest in keeping people in their houses. Lenders say they have fixed these problems, and that few if any homeowners were evicted who did not deserve it. But as recently as a few weeks ago, a major bank, HSBC, which is based in London, was forced to suspend foreclosures when regulators found a number of deficiencies. Enforcement action is expected to follow the release of the report by the Federal Reserve, the Office of the Comptroller of the Currency and other banking regulators. Those fines and penalties would be separate from any monetary settlement that results from talks with the state attorneys general."

About two million households are in foreclosure, and another two million are in severe default. Data released this week by an analytics firm, LPS Applied Analytics, showed that banks were making some progress with modifications but that foreclosure was becoming, for better or worse, a permanent state for many families, the article said, adding that "banks say cutting the mortgage debt of foreclosed families into something more bearable creates issues of moral hazard - that people will default to get a better deal."

"Even as JPMorgan Chase representatives were meeting with the task force, the bank's chief executive, Jamie Dimon, was rejecting the idea of writing down delinquent balances. 'Yeah, that's off the table,' Mr. Dimon told reporters after a United States Chamber of Commerce forum in Washington," the article said.