Housing Market, Banks | featured news

U.S. regulators' efforts to settle with banks over improper mortgage foreclosures are being hampered by infighting among the groups involved in the talks, and a settlement may take a while, according to sources familiar with the matter.

Major U.S. banks are about to get penalized for "critical deficiencies" and shortcomings in how they handled foreclosures, a top federal regulator said Thursday at a Senate Banking Committee hearing examining the Dodd-Frank Act six months after its congressional approval.

Bank of America reported Friday that it had a $1.2 billion loss in the fourth quarter of last year, including a previously announced charge of $2 billion reflecting a decline in the value of its home loans and insurance business.

Banks seized more than a million U.S. homes in one year for the first time last year, despite a slowdown in the last few months as questions around foreclosure processing arose, a leading firm said on Thursday.

In a ruling that may affect foreclosures nationwide, the Massachusetts high court has voided the seizure of two homes by Wells Fargo & Company and US Bancorp after the banks failed to show that they held the mortgages at the time of the foreclosures.

Regulators have opened a new line of inquiry in their mortgage foreclosure probe and are asking big Wall Street banks about the beginning stages of mortgage securitization, two sources familiar with the probe said.

Changing the face of foreclosure in America will take some time, several state attorneys general said Wednesday, cautioning that an agreement with major lenders over revamped foreclosure practices was not imminent. "We want to move as quickly as possibly but it has to be done right," said Roy Cooper, the attorney general of North Carolina. "We have plowed this ground before."Ever since the law enforcement officials from all 50 states signed on last month to a highly publicized investigation of big mortgage lenders, there has been a public tug of war.

With one out of every 245 Minnesota housing units in foreclosure during September, news has broken that Wells Fargo, along with other big banks, may have helped push some homeowners off properties with the use of "robo signers."And the bank, with deep ties to Minnesota, has no intention of changing its ways.

Officials in 49 states have launched a joint investigation into allegations that mortgage companies mishandled documents and broke laws in foreclosing on hundreds of thousands of homeowners.

The attorneys general of up to 40 states plan to announce soon a joint investigation into banks' use of flawed foreclosure paperwork.