Massachusetts Attorney General Martha Coakley announced today that she had "lost confidence" in the talks between the 50 state’s attorneys general and a group of large national banks and servicers aimed at coming up with a settlement deal for problems revealed during last fall’s robo-signing crisis.

Her office will be launching its own litigation aimed at "creditor misconduct in connection with unlawful foreclosures, including the failure to establish the right to start a foreclosure as well as filing false or misleading documents with registries in the commonwealth," she said in a statement.

Brad Puffer, director of communications for the attorney general, stopped short of saying that Coakley would withdraw from the talks entirely, saying that her office would still be willing to review a deal — but that one had yet to be presented to them. Coakley’s office would not be willing to sign any deal which included a waiver of liability on corrupt or flawed practices related to mortgage securitization or the Mortgage Electronic Registration System (MERS), Puffer confirmed.

Coakley’s statement is the latest sign of doom for the troubled talks between the banks and the state AGs, which have dragged on since news of the robo-signing scandal broke last September. For their part, participating banks had been seeking broad liability waivers which would encompass more servicer conduct than the specific practice of robo-signing.

Coakley and several other attorneys general have said they were unwilling to agree to such waivers since there have as yet not been full investigations into servicer practices. Several states have launched their own investigations into mortgage related issues, including mortgage securitization. Earlier this week, California Attorney General Kamala Harris withdrew from the talks.

"We’re pleased that she’s aggressively pursuing these banks for the fraud," said Kevin Harvey, first assistant register of deeds in Essex County. The South Essex register, John O’Brien, has been a vocal opponent of the big banks’ registration practices, particularly the use of MERS. "It’s been almost a year since Register O’Brien has exposed this scheme that the big banks have used against people’s property rights, and it’s clearly time that they be held accountable for the damage that they have done to the citizens of Massachusetts and to our economy."

Harvey said his office has been in touch weekly with investigators from the attorney general to aid them in their investigation of MERS.

The mere fact of an investigation will have little practical immediate impact on foreclosures and closings, said Christopher Pitt, a senior associate at Boston-based law firm Robinson & Cole and president-elect of the Real Estate Bar Association (REBA). Given that there’s little hope of a universal settlement at this point, and much uncertainty remaining about lenders’ portion of responsibility for the crisis, an investigation by Massachusetts might even help accelerate a resolution.

"The problem with the real estate market is that there’s a deep lack of confidence, both on the part of consumers and the part of lenders," said Pitt. "REBA applauds the active efforts of our attorney general to resolve the real estate crisis."