Dec 31 U.S. regulators are close to securing
another multibillion-dollar settlement with the largest banks to
resolve allegations that they unlawfully cut corners when
foreclosing on delinquent borrowers, a source familiar with the
The settlement with five big banks would be part of a larger
deal that the Office of the Comptroller of the Currency hopes
will include 14 banks and total about $10 billion, the source
Such a settlement would address an outstanding issue that
was left unsettled after the $25 billion deal that the banks
reached in February with the Justice Department, housing
authorities, and state attorneys general.
In 2011, the OCC had separately required the big banks to
"look back" and compensate borrowers wrongfully foreclosed upon
in 2009 and 2010. It appears that the case-by-case analysis is
proving too cumbersome, and the banks are instead opting for a
The top five mortgage lenders -- Bank of America Corp
, Wells Fargo & Co, JPMorgan Chase & Co,
Citigroup Inc and Ally Financial Inc -- may reach a deal
in the coming days, the source said.
The largest banks would pay the majority of the $10 billion
target. That money would be paid out to a group of borrowers
foreclosed upon during the period of time covered by the review,
said the source, who was not authorized to speak publicly.
The OCC and the banks are still negotiating how to calculate
individual payouts, the source said, adding that regulators will
give the banks credit for compensation they have already given
borrowers as part of ongoing foreclosure reviews.
The New York Times first reported the pending deal.
"The Office of the Comptroller of the Currency is committed
to ensuring the Independent Foreclosure Review proceeds
efficiently and to ensuring harmed borrowers are compensated as
quickly as possible," the OCC said in a statement.
Ally, Wells Fargo, JPMorgan, Bank of America and Citigroup
declined to comment.