Foreclosure deal slowed by infighting: sources
By Joe Rauch and Dave Clarke
Regulators’ efforts to settle with banks over improper mortgage foreclosures are being hampered by disagreements among the groups involved over the size and shape of an accord, according to sources familiar with the matter. Banking regulators and a coalition of state attorneys general are trying to forge a settlement with the largest banks, which have been accused of foreclosing on borrowers without having the necessary paperwork in place. A settlement would relieve a potentially large legal liability and reputational black eye for the banks, as they could face a myriad of lawsuits and fines without a universal agreement. Sources familiar with the talks say the various groups disagree on the parameters of a settlement, with bank regulators pushing to outline a settlement plan as soon as mid-March. Analysts said the discussions highlight the difficulties of reaching a universal settlement as disparate groups are involved in the negotiations. “It is herding cats, there’s no question about it, and they are not always the most agreeably tempered cats,” said Karen Shaw Petrou, managing partner at Federal Financial Analytics, a firm that advises on regulatory policy.