Efforts to reach a coordinated settlement with mortgage servicers over alleged "robo-signing" foreclosure practices are still in the preliminary stages, with federal regulators, state attorneys general still hashing out the size and scope of any deal with banks.
Negotiators who are reportedly pushing for a $20 billion legal settlement that would help mortgage lenders put the robo-signing controversy behind them have set off a debate over whether that amount is too large or small, and how money from any settlement would be used.
As many as 14 loans servicers could be parties to any settlement of allegations that they took shortcuts in preparing documents used in foreclosure proceedings, the Wall Street Journal reported Thursday. Although some federal regulators and state attorneys general support a $20 billion settlement, the proposal hasn’t been presented to loan servicers, the Journal reported.
Also to be decided is whether loan servicers would pay civil fines, provide principal reductions for loan modifications, or some combination of both.