WHEN: Today, Tuesday, November 16th
WHERE: CNBC's "Closing Bell"
Following is an unofficial transcript of breaking news from CNBC's Diana Olick on "Closing Bell" today, Tuesday, November 16th.
All references must be sourced to CNBC.
DIANA OLICK: AS WE SPEAK TOP MORTGAGE EXECUTIVES FROM BANK OF AMERICA AND JP MORGAN, AS WELL AS IOWA ATTORNEY GENERAL TOM MILLER, HEADING UP THE 50 STATE INVESTIGATION INTO ROBOSIGNING, ARE SQUARING OFF IN THE SENATE BANKING COMMITTEE.
YOU'RE LOOKING AT A LIVE PICTURE OF THE TESTIMONY NOW, BUT CNBC HAS LEARNED FROM MULTIPLE SOURCES ON BOTH SIDES, THAT THE BANKS AND AG'S ARE NEARING A SETTLEMENT AND WE HAVE DETAILS OF THAT POTENTIAL DEAL.
FIRST, BANKS WOULD PAY INTO A FUND USED TO COMPENSATE BORROWERS WHO HAVE CLAIMS AFTER THEIR HOME HAS BEEN SOLD IN FORECLOSURE. THE FUND WOULD BE ADMINISTERED BY THE STATE AG'S, NOT THE BANKS. BORROWERS WOULD HAVE TO PROVE THEY WERE WRONGED IN THE FORECLOSURE PROCESS. SO FAR NO DOLLAR FIGURE HAS BEEN PUT ON THAT, AND EACH BANK COULD SETTLE ON ITS OWN NUMBER.
SECOND, THERE WOULD BE AN INDEPENDENT, THIRD PARTY MEDIATOR TO REVIEW THE CASES SEEKING PAYMENT FROM THE FUND.
THIRD, BANKS WOULD AGREE TO DO AWAY WITH THE DUAL TRACK OF MODIFICATIONS AND FORECLOSURES. A CHIEF COMPLAINT OF BORROWERS IS THAT THEY ARE RECEIVING FORECLOSURE NOTICES WHILE STILL SEEKING MORTGAGE MODIFICATIONS. MODIFICATION EFFORTS WOULD HAVE TO BE EXHAUSTED BEFORE FORECLOSURE PROCEEDINGS COULD EVEN START. THAT OF COURSE WOULD LENGTHEN THE ALREADY LONG FORECLOSURE TIMELINE EVEN FURTHER.
NOW THERE HAS BEEN TALK OF BANKS AGREEING TO SOME PRINCIPAL WRITE-DOWN AS PART OF A SETTLEMENT. ATTORNEY GENERAL MILLER DIDN'T REFUTE THAT IN AN INTERVIEW I DID WITH HIM LAST WEEK ON CNBC.COM. THAT WAS POSTED ON THE REALTYCHECK. SOURCES TODAY TELL ME, THAT HAS "BEEN ON THE TABLE."
THE SETTLEMENT IS NOT EXPECTED FOR AT LEAST A MONTH, BUT NO QUESTION, THE RECENT ELECTION OF 17 NEW AG'S IS PUSHING THE PROCESS FULL STEAM AHEAD. THERE MAY OF COURSE NOT BE ONE UNIVERSAL SOLUTION. BANKS COULD DO EACH ONE ON THEIR OWN.
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