Are we finally seeing signs that we'll soon have a settlement between regulators, states and the big mortgage companies over tainted foreclosure practices? Federal agencies and state attorneys general have given the top banks and servicers a settlement proposal, while continuing to negotiate monetary penalties, Bloomberg reports.

The 27-page document delivered last week was "a binding legal requirement" that would govern how loans are serviced and foreclosures conducted. Loan modifications best practices are apparently also up for negotiation.

We can only hope such a document eventually brings all federal agencies with a stake in the battle--from bank regulators to the FTC--and the states on the same page as the industry. The top banks and services need an organized solution, not a series of willy-nilly remedies.

I think we'll eventually end up with a restitution fund, a ban on simultaneous foreclose and modification proceedings, and a host of other procedural reforms.

The big issue is whether MERS will be addressed. This looms as one of those sprawling issues that is being decided on a case-by-case basis by state and bankruptcy judges. Some clarity on whether MERS is legal, or what it would take to make MERS legal, would be appreciated.

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