Industry observers said California's withdrawal from negotiations for a settlement between state attorneys general and major mortgage servicers effectively puts an end to any chance of a multistate settlement. "There's no point to cutting a deal if it doesn't include California or New York, and now both are out of the talks," said Jaret Seiberg, an analyst at MF Global Washington Research Group. "This ends the talks for now. There's little in the short-term that could cause the talks to suddenly have momentum."

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