ABC News' Mary Bruce Reports: Federal officials leading the investigation into allegations that mortgage companies broke state laws when processing foreclosures said today they hope to agree on a final settlement with banks within two months.
“What we’re really trying to do is change a dysfunctional system… We’re hopeful that we can reach a resolution that will be good for homeowners and good for the banks in the long run and most importantly good for the country,” Iowa Attorney General Tom Miller, who is leading the 50-state investigation, told reporters at a press conference in Washington today.
Miller said he is hopeful they can wrap up the process in the next two months. “I mean a soft two, not quite a literal two, but I’m hoping,” he said.
North Carolina Attorney General Roy Cooper warned they should move quickly so uncertainty doesn’t linger too long. “We realize that the result that we come to can have an impact on the housing market and hence the economy. That’s why all of us at the table want it to be a positive impact and part of that is moving as quickly as we can,” he said.
Regulators and the state attorneys general are hoping to negotiate a settlement over the reported mortgage servicing problems, including the use of so-called “robo-signers” who rushed foreclosures through the system without properly reviewing the details of the cases.
“Laws are not being followed by the servicers. That absolutely has to change and much of what we have dedicated our time to is ensuring a process that is a fair one,” Illinois Attorney General Lisa Madigan said.
Last week the state attorneys general sent the nation’s largest banks a 27-page proposal outlining how they should overhaul their mortgage servicing procedures. Miller declined to discuss the details of the plan today but said the proposal did not detail a revised mortgage modification plan or what fines the banks should pay.
“Not everything in the 27 pages will be agreed to,” Miller said. “A lot of what we’re asking for… while it’s comprehensive, a lot of it is things that the servicers should have done three years ago.”
Miller admitted that “we’re considering all options” going forward, including a compensation fund for victims.