Dec 31 U.S. regulators are nearing a $10 billion
settlement with several banks that would end the government's
efforts to hold lenders responsible for faulty foreclosure
practices, the New York Times reported, citing people with
knowledge of the talks.
Under the settlement currently being discussed, about $3.75
billion would go to people who have already lost their homes,
the New York Times said.
The latest settlement would be potentially more than a broad
pact agreed in February between state attorneys general and five
large banks. That set aside $1.5 billion in cash relief.
In February, Bank of America Corp, Wells Fargo & Co
, JPMorgan Chase & Co, Citigroup Inc and
Ally Financial Inc agreed to a $25 billion government settlement
to release them from claims over faulty foreclosures and the
mishandling of requests for loan modifications.
The New York Times said 14 banks are now involved in the
latest settlement talks with the U.S. authorities, including the
five that had agreed to a similar settlement in February. The
paper did not name other banks. ()
A deal could be reached by the end of the week between the
14 banks and the nation's top banking regulators, led by the
Office of the Comptroller of the Currency, four people with
knowledge of the negotiations told the newspaper.
As per the settlement being negotiated, $6 billion would
come from banks to be used for relief for homeowners, including
reducing their principal, helping them refinance and donating
abandoned homes, the New York Times said.
Also, the banks will have to hire independent consultants to
comb through loan records to determine whether the banks
illegally charged fees, forced homeowners to take out costly
insurance or miscalculated loan payment amounts, according to
Wells Fargo spokesman Ancel Martinez had no immediate
comment on the New York Times report when contacted by Reuters,
while JPMorgan spokesman Joseph Evangelisti declined to comment.
None of the other banks named in the report could
immediately be reached for comments by Reuters outside of
regular U.S. business hours.