Proposed settlement with banks over foreclosure practices dealt a setback Had Schneiderman backed the deal Tuesday, as several informed observers expected he would, it could have increased the likelihood that remaining holdouts such as California, Delaware and Nevada - which have shared Schneiderman's long-standing concerns that the settlement might let banks off the legal hook too easily - would also sign on. More than 40 states have backed the proposed agreement, and officials leading the talks remain adamant that the multibillion-dollar deal will go forward whether New York and other undecided states participate or not. Schneiderman's blessing could help reassure liberal groups and consumer advocates who have been critical of the Obama administration over the proposed settlement, saying it doesn't go far enough in punishing banks for their actions and would help only a fraction of homeowners who need aid. One person familiar with the negotiations said several banks wanted Schneiderman to withdraw a suit he filed on Friday against prominent financial firms, saying they had acted deceptively by filing erroneous and fraudulent foreclosure documents through a popular electronic mortgage registry designed to allow firms to save time and money by bypassing local property recording requirements. The person spoke on the condition of anonymity because the talks were ongoing. It was unclear whether Schneiderman had intended on Tuesday to address the status of those lawsuits during the news conference. At 2:11 p.m., Schneiderman's press office sent an advisory saying that he would "make brief remarks" about the pending settlement during a 6 p.m. conference call, then take questions from reporters. At 5:49 p.m., the office sent another alert saying that the call had been "postponed indefinitely." The office did not respond to a request for comment. The current settlement stems from revelations in late 2010 that banks had filed hundreds of thousands of flawed and fraudulent foreclosure documents in their rush to keep up with a tidal wave of delinquent loans wrought by the housing crisis, a practice known as "robosigning." Under the proposed deal, the five banks involved - Wells Fargo, Bank of America, J.P. Morgan Chase, Ally Financial and Citigroup - would agree to end those practices and overhaul the often-convoluted way they deal with borrowers trying to stay in their homes. They also would pay about $25 billion that would go toward lowering loan balances for borrowers who owe more than their houses are worth, helping others refinance at lower rates and paying up to $2,000 to hundreds of thousands of people who lost homes to foreclosure. California's participation in the settlement could increase the final size of the agreement, given the large number of foreclosures in the state and the potential legal liability banks face there. A spokesman for Attorney General Kamala Harris, who previously had called the proposed settlement "insufficient" for California homeowners, said she, too, had yet to make a final decision. Although fellow attorneys general prefer that Schneiderman support the deal, his long-standing criticism of the negotiations has caused acrimony and infighting. From the time he took office in January 2011, Schneiderman insisted that any robosigning settlement with banks should not grant a legal release from separate claims over how they bundled and sold mortgages to investors, a process known as "securitization." Rather, he argued in favor of a more comprehensive investigation of mortgage-related misdeeds aimed at reaching a larger settlement with banks down the line. Iowa Attorney General Tom Miller, the top state official leading the negotiations, removed Schneiderman from the coalition's executive committee last summer, saying he had "actively worked to undermine" the efforts to reach a settlement. The move backfired, with some lawmakers, editorial boards and liberal activists rallying behind Schneiderman and praising his skepticism of the talks and his push for more in-depth inquiries. Miller and others involved in crafting the deal felt bitter about what they saw as unfair misperceptions. They insisted they had no interest in letting banks off easy and were pushing for a narrow legal release so as not to hinder further investigations by Schneiderman and others. Staff writer Sari Horwitz contributed to this report.