More than 40 U.S. states have agreed to a nationwide settlement over foreclosure abuses.

The deal would force the five largest mortgage lenders to reduce loans for about 1 million households. And the remaining holdouts could sign onto a deal in the coming days.

Officials say that negotiators worked well into Monday night to persuade more states to join the settlement. There is growing optimism that California, Delaware, Nevada, New York and others will eventually sign on.

The reduced loans would benefit homeowners who are behind on their payments and owe more than their homes are worth. The lenders _ Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial _ would also send checks for about $2,000 to hundreds of thousands of people who lost homes to foreclosure.