Banks seek refuge from foreclosure investigations
A foreclosure/price reduced sign stands in front of a home for sale in Miami, Florida.
Stacey Vanek Smith: Banks have been talking with the federal government about a legal settlement for some of their foreclosure practices.
But some states may be getting in the way, as Nancy Marshall-Genzer explains.
Nancy Marshall-Genzer: The deal would settle charges over alleged improprieties in the foreclosure process. Banks are accused of using robo-signers who barely glanced at foreclosure documents before signing them.
The deal is being pushed by the Obama administration to resolve a backlog of foreclosures which is stalling the housing recovery. The banks would pay a lump sum as part of a possible settlement. In return, the banks want immunity from states that are conducting foreclosure investigations.
Some state attorneys general don't want to let the banks off the hook. One of them, New York's Eric Schneiderman, has been investigating whether banks were straight with investors who bought securities made up of bundled mortgages.
Danny Kanner is a spokesman for the New York AG's office.
Danny Kanner: Ongoing investigations by attorneys general cannot be shut down by efforts to settle quickly, and those responsible must be held accountable.
Guy Cecala is publisher of Inside Mortgage Finance. He says the banks shouldn't expect to get issues like robo signing and investor rights negotiated away all at once.
Guy Cecala: Those are separate issues and there's no way you're really going to get a get out of jail free card on both of those issues at the same time.
Either way, Cecala says, the troubled housing market needs a deal soon.
In Washington, I'm Nancy Marshall-Genzer for Marketplace.