The Securities Industry and Financial Markets Association pushed back against the proposed settlement between the state attorneys general and mortgage servicers. SIFMA acknowledged the proposal is in its preliminary stages but warned the terms as they're set now would pose a serious risk to mortgage-backed securities investors who would be forced to absorb losses during extended foreclosure time lines. "This would further harm their confidence in the private-label securitization markets that are so vital to the nascent economic recovery," SIFMA Executive Vice President Randy Snook said in a statement Wednesday. The proposal would prohibit practices such as dual-track foreclosures, and would require servicers to put borrowers through modification programs before starting the foreclosure process. A spokesperson for Iowa Attorney General Tom Miller told HousingWire that there have been no face-to-face negotiations with the banks yet. But when the settlement is struck, it would be a legal binding agreement for how these companies would pursue foreclosures in the future. John Walsh, the acting comptroller of the currency, said in a speech before the American Bankers Association Tuesday that the reforms are necessary for a healthy housing market. Consumer advocates have long argued that servicers need to be held accountable for the foreclosure issues as well. But SIFMA warned the extended time lines would also saddle the housing economy with more blight and vacant homes, especially with Republicans targeting programs aimed at rehabbing and reselling these properties. The cost of mortgages could go up in the future as well under the proposed agreement, SIFMA said. Snook added that because of the nature and scope of the reforms, these negotiations should not be taking place in the dark. "Given the broad impact of this reform, we firmly believe the process of developing broad servicing standards should be open to input from a range of stakeholders," Snook said. Write to Jon Prior. Follow him on Twitter: @JonAPrior