California Attorney General Kamala Harris, who dropped out last week from talks aimed at wringing a huge settlement from banks accused of foreclosure abuses, remains open to a deal if it involves "a stronger proposal" from lenders, according to a person familiar with the situation.

U.S. and state officials held daylong meetings Tuesday and Wednesday, trying to forge a deal with Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. In return for a settlement, those companies...