Bank of America CEO urges settlement of foreclosure crisis probe

A quick settlement of the 50-state probe of the U.S. mortgage foreclosure crisis would be the best solution for all involved, the chief executive of Bank of America Corp. said Tuesday.

The call for a settlement by Bank of America CEO Brian Moynihan was followed by a report from CNBC that Iowa Atty. Gen. Tom Miller, who is leading the 50-state probe, was getting close to a settlement with Bank of America — the largest U.S. mortgage servicer — JPMorgan Chase & Co. and Wells Fargo & Co.

Under the proposed settlement, the banks would pay into a fund for foreclosed borrowers, CNBC reported.

The settlement, which was not expected for at least a month, would also include banks doing away with simultaneous modification and foreclosure proceedings with individual borrowers, CNBC said.

Banks are accused of having used “robo-signers” to sign hundreds of foreclosure documents a day without proper legal review. Allegations that banks’ use of shoddy paperwork resulted in struggling borrowers being illegally evicted from their homes reignited public anger with banks that received billions of dollars in taxpayer aid during the financial crisis.

“It is in everyone’s best interest to get this settled and behind us,” said Moynihan, speaking at the Bank of America Merrill Lynch Financial Services conference in New York.

U.S. bank regulators are also investigating bank foreclosure practices.

News of a move toward a possible settlement came as major U.S. banks sought to assure lawmakers that they had a handle on mortgage servicing problems amid renewed pressure to find ways to keep borrowers in their homes.

Top officials from Bank of America and JPMorgan Chase testified Tuesday before the Senate Banking Committee in the first appearances on Capitol Hill by major lenders since the furor over sloppy foreclosure paperwork erupted in September.