Cheyenne Hopkins

After months of stalemate, the state attorneys general have proposed new terms to the top five mortgage servicers that drop some controversial provisions of their first attempt at a settlement, including a push to force banks to reduce principal on thousands of mortgages.

While President Obama is the one who chooses nominees for key financial services policy posts, it is a Republican from Alabama, Sen. Richard Shelby, who appears to have a big say in whether a candidate is actually confirmed.

Lawmakers from both political parties sharply criticized the banking regulators on Thursday for their risk-retention proposal, arguing it will lead to a credit crunch.

An enforcement action against a bank is almost always bad news for the institution involved. But a federal bank regulators' order released Wednesday against the top 14 mortgage servicers was likely to help, not hurt, the banks, providing them with added leverage as they attempt to negotiate a separate settlement with the 50 state attorneys general and several federal agencies.

Iowa Attorney General Tom Miller blasted a study Tuesday that said proposed servicer settlement terms could cost the economy $10 billion a year.

A proposed settlement with the nation’s top five residential servicers could prolong the foreclosure crisis, drive up mortgage interest rates, slow new home construction and cost $7 billion to $10 billion a year, according to a study from three top economists.

An agreement between the Obama administration and lawmakers over this year's fiscal budget includes audits of the newly created Consumer Financial Protection Bureau.

Although lawmakers were ostensibly supposed to debate ways to overhaul the structure and authority of the Consumer Financial Protection Bureau, a hearing Wednesday in a House Financial Services subcommittee was sidetracked by questions over whether the agency should exist at all.

Elizabeth Warren, the Obama administration official in charge of setting up the Consumer Financial Protection Bureau, again defended her role in a pending settlement between several state and federal agencies and the top 5 mortgage servicers.

Top Republicans on the House Financial Services Committee are once again criticizing Elizabeth Warren, who is leading the Consumer Financial Protection Bureau creation, for her role as an advisor in the mortgage servicer settlement talks.

Taking a piecemeal approach to housing reform, House Republicans introduced a series of bills Tuesday to scale back Fannie Mae and Freddie Mac.

Although bankers are likely to have significant concerns about the risk retention proposal due next week, they appear to have won at least one victory already: a choice over how to structure risk that must be retained.

Four state attorneys general have sent a letter to Iowa AG Tom Miller objecting to provisions of the 27-page proposed settlement with the top five servicers.

After helping financial institutions weather the financial crisis and oversee the Troubled Asset Relief Program, Richard Neiman is expected to step down as New York banking superintendent in April.

As state and federal officials struggle to reach a global settlement with the largest mortgage servicers over problems in the foreclosure process, regulators have grown frustrated with the lack of leadership on their side, saying no one is making an effort to corral the multitude of agencies involved.

The backlash against an aggressive mortgage servicing settlement reached new heights on Wednesday as two state attorneys general vocally opposed the proposed deal.

Many believe the government went overboard by setting unrealistic goals, a move that could backfire and give banks more leverage to fight some of the most onerous requirements.

The 27-page term sheet handed to the five largest residential servicers last week is a detailed, dense list of requirements that, if implemented as proposed, would fundamentally change the relationship between servicers, investors and borrowers.

Federal regulators issued a tough opening salvo in settlement talks with the nation's largest residential servicers, presenting them with a 27-page term sheet that would force major changes to the industry and step up loss mitigation efforts.

After months of infighting, the federal banking agencies have reached an agreement on risk retention standards that would include some new rules for servicers, according to sources familiar with the matter.