Mortgage servicers like Wells Fargo and Bank of America Corp. are likely to avoid nearly $20 billion in penalties after several U.S. agencies signed deals without fines. 

Fifty state attorneys created a task force that were arguing over the proposed sanctions when the Office of the Comptroller of the Currency, Federal Deposit Insurance Corp. and the Federal Reserve started to cut deals. Although all of the fines will not be eradicated, the resulting measures are likely to ease the pressure on banks as well as erode states' leverage. 

According to Gilbert Schwartz, a former Fed attorney, "This puts the attorneys general in an uncomfortable position" by reducing the list of demands on mortgage providers. As many as 14 mortgage servicers signed accords this week agreeing to improve communications with borrowers and improve internal controls. This comes after the industry fell under fire last year for "robo-signings" and other problems.

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