Tuesday, April 12, 2011

Hopes for a Settlement Fade in Foreclosure Talks

Hopes are fading for a far-reaching settlement between regulators and banks over improper home foreclosures as some regulators press ahead to reach their own settlements with banks that others involved in the talks deem weak, the Wall Street Journal reported today. The dispute pits federal regulators against state attorneys general, who are seeking stiff penalties and comprehensive changes in the way banks foreclose on homeowners and modify loans. Advocates of tougher sanctions accuse federal banking regulators, including the Office of the Comptroller of the Currency and the Federal Reserve, with going easy on the banks. Federal regulators are on the verge of sending their orders, and federal and state officials are scrambling to maintain an uneasy alliance as talks reach a critical point and test whether there can be a universal settlement. A letter sent yesterday to the Federal Reserve from 22 current and former members of the board's Consumer Advisory Council called the proposed consent orders "profoundly disappointing" and said they leave "too much discretion" to mortgage companies. They fail to impose penalties, the letter said, for their wrongful conduct.  http://online.wsj.com/article/SB10001424052748703841904576257293887938706.html?mod=WSJ_hp_LEFTWhatsNewsCollection#printMode