WASHINGTON (AP) — Arizona and Florida, two of the states hit hardest by the housing crisis, will join a nationwide settlement over foreclosure abuses, officials with direct knowledge say. They will join more than 40 other states in approving a deal that would benefit many Americans who lost their homes or can't afford their mortgages.

Formal announcements could come within a week, according to the officials, who spoke on condition of anonymity because they weren't authorized to discuss the settlement publicly.

Arizona and Florida's involvement buoys hopes that a full 50-state deal is imminent.

Arizona Attorney General Tom Horne said he first wants to resolve a separate foreclosure-related lawsuit his state filed against Bank of America.

Florida officials say they are still in discussions. Attorney General Pam Bondi "remains engaged in the settlement discussions in order to ensure that Floridians receive their fair share in the agreement," she said in a statement.

The nationwide deal would be the biggest settlement involving a single industry since a 1998 multistate tobacco deal. It would force the five largest mortgage lenders to reduce loans for about 1 million households. The reduced loans would benefit homeowners who are behind on their payments and owe more than their homes are worth.

The lenders would also send checks for about $2,000 to hundreds of thousands of people who lost homes to foreclosure.

The settlement stems from abuses that occurred after the housing bubble burst. Many companies that process foreclosures failed to verify documents. Some employees signed papers they hadn't read or used fake signatures to speed foreclosures — an action known as robo-signing.

Five major states — California, Delaware, Massachusetts, New York and Nevada — are still considering whether to join the settlement. Massachusetts, which filed its own lawsuit against the five major lenders in December over deceptive foreclosure practices, has been quiet about its thinking.

But Massachusetts Attorney General Martha Coakley acknowledged last month she thought a deal between the banks and states would be reached and that she would keep an "open mind" as to whether Massachusetts would accept an agreement.

California still has "significant sticking points," but they may be settled in the coming days, said officials with direct knowledge of the negotiations. That represents progress from a few weeks ago, when California Attorney General Kamala Harris called the proposed settlement "inadequate." California officials walked away from the negotiating table altogether in September.

California's backing is particularly crucial. It was among the states hardest hit by the foreclosure crisis. And it has the most residents "underwater": They owe more on their loan than their home is worth. Without California's participation, the money available to homeowners nationally would be about $19 billion rather than $25 billion.

Homeowners in states that opt out of the deal wouldn't share in the settlement money. The money available to homeowners could run as high as $25 billion if all states approve the deal.

The reduced loans would benefit homeowners who are behind on their payments and owe more than their homes are worth. The lenders would also send checks for about $2,000 to hundreds of thousands of people who lost homes to foreclosure.

The five lenders — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — have already agreed to the settlement. In settling the charges, the states would agree not to pursue further investigations against the banks in civil court. The deal would not protect the banks from criminal investigations.