Banks Spar Over Loan Settlement

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BY DAN FITZPATRICK, NICK TIMIRAOS AND RUTH SIMON

U.S. banks trying to negotiate a settlement over the home-foreclosure mess have hit a new hurdle: They are squabbling over how to split the tab.

The lack of a deal so far among the nation's largest home-loan servicers has already depressed bank stocks, and an extended impasse could further spook investors.

"As time goes on, banks will lose the PR battle," said Paul Miller, banking analyst with FBR Capital Markets. The terms of a settlement, he said, are less important than getting it done. "They need to get everything behind them."

As federal and state officials prod banks toward a ...

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