U.S. banks face a deadline of July 13 for submitting plans to federal regulators detailing how they will overhaul their mortgage and foreclosure practices. The problem is that the regulatory effort to compel improvement is proceeding in scattershot fashion, and it's unclear exactly what the ultimate shape of reform will look like.

As of now, we are only half way through the settlement process. The most concrete progress so far has been a series of consent decrees reached by the major banks reached in April with the Office of the Comptroller of the Currency, the Federal Reserve and the Office of Thrift Supervision. As part of those pacts, which also included consent decrees reached with MERS and LPS, big mortgage lenders agreed to specific reforms like ending simultaneous foreclosure and modification negotiations, providing single points of contacts, reviewing prior foreclosures, allowing review by independent consultants, promoting better management systems and enhanced compliance policies in general.

The wild card of course is the on-going negotiations with the states. Talks have been stumbling in recent months as signs emerge that the states are fragmented in their approach. Early on, people thought that the state settlement might go farther than the federal consent decrees, requiring perhaps mandatory write-downs, mortgage balance reductions, and heftier fees. As of right now, it's still unclear, but banks still face a July 13 deadline.

For more:
- here's a CNBC article

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