[Update 1: Adds comment from Iowa AG] Sources close to the negotiations between the state attorneys general and mortgage servicers told the New York Post Wednesday they are nearing a $60 billion settlement in the robo-signing investigation, but the lead AG on those negotiations said that number is not accurate. "The unsourced information that we are pursuing a $60 billion settlement is simply not accurate," the spokesman for Iowa AG Tom Miller told HousingWire Wednesday. "While we’re not releasing a number, I will note that the $60 billion figure is not even close." Miller's office previously told HousingWire a fund is being negotiated to provide modification and even principal writedowns for delinquent mortgages. While progress has been made, no agreement has been reached. Analysts said that not all of the reported $60 billion would go to the state as a fine. Some would go to modify mortgages. If so, the settlement could be offset by the amount of loss provisions these banks have already set aside on these loans. "While we have long held the belief that the states attorneys general will be doing everything they can to reach a settlement in the robo-signing scandal that gives them a significant headline number, we believe that headlines this morning that they are nearing a $60 billion settlement are misleading," said Paul Miller, an analyst at investment bank FBR Capital Markets. "Even if the final settlement were to approach anything near the $60 billion being reported, we believe the actual 'cash' component will be significantly less and will likely to be used towards modifying loans." Since major banks froze the foreclosure process late last year to fix improperly signed foreclosure affidavits, final settlement figures on the AG investigation ranged between $5 billion to $20 billion before Wednesday. FBR anticipates a significant portion of the settlement would include modifications already in the process, including any principal writedowns under way. "In effect this makes the $60 billion a significantly inflated number," Miller said. Miller also added the AGs could be rushing to strike a deal before the Consumer Financial Protection Bureau opens July 21. This could be to avoid any more influence from the agency than the guidance Elizabeth Warren, the CFPB architect and front-runner for the director spot, already gave. But Miller said the boost to the speculated settlement figure could mean the AGs are attempting to "absolve any future legal claims by the state officials," including securities issues raised by New York AG Eric Schneiderman. For the largest banks such as JPMorgan Chase (JPM), Bank of America (BAC) and Wells Fargo (WFC) removing this legal overhang could "re-hash capital adequacy issues" but would be another step in putting the mortgage mess behind them. "If this is the case, a settlement here would be a significant boost to the industry by allowing them to put behind them all state-related claims and provide them with the legal certainty they need for the modification and foreclosure process," Miller said. Write to Jon Prior. Follow him on Twitter @JonAPrior.