U.S state attorneys general are negotiating a legal settlement with four regional banks for their involvement in the “robo-signing” crisis. The agreement would be similar to the $25 billion National Mortgage Settlement brokered with five national lenders in February. That agreement included sweeping compliance mandates to prevent the widespread improper notarization and document signing practices at the heart of the foreclosure crisis.
The banks have had preliminary talks with state and federal officials, who are investigating claims that loan servicers mishandled foreclosure documents. However, the timing of a settlement is not yet known.
If a settlement is reached, the banks will face a financial obligation and likely will have to comply with the servicing standards. The NNA has established a Trusted Notary program to help lending institutions reach compliance with the new mortgage industry regulations.