Bank of America Corp. , JPMorgan Chase & Co. and three other U.S. mortgage servicers are in advanced talks to resolve state and federal claims over faulty foreclosures, according to two people briefed on the matter.Negotiators tentatively set a July 13 target for a settlement, which may exceed $20 billion, the people said, speaking on the condition of anonymity because the talks are private. Some banks are briefing their boards on deal terms, which would form state and federal funds to resolve claims and provide relief to borrowers, they said. The target date may be postponed as parties iron out details.

Attorneys general and federal officials are negotiating with the group of lenders also including Citigroup Inc. , Wells Fargo & Co. and Ally Financial Inc. to resolve probes into how banks treated borrowers during a surge in mortgage defaults. A final agreement, setting standards for servicing loans and processing foreclosures, may serve as a template for claims against the rest of the industry.

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