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U.S. banks offered deal over lawsuits-FT
September 6, 2011 / 1:10 AM / 6 years ago

U.S. banks offered deal over lawsuits-FT

LONDON, Sept 6 (Reuters) - Big U.S. banks in talks with state prosecutors to settle claims of improper mortgage practices have been offered a deal that is proposed to limit part of their legal liability, the Financial Times reported on Tuesday.

The FT said state prosecutors have proposed a deal to limit part of the banks’ liability in return for a multibillion-dollar payment.

The talks aim to settle allegations that banks including Bank of America (BAC.N), JPMorgan Chase (JPM.N), Wells Fargo (WFC.N), Citigroup (C.N) and Ally Financial GKM.N. seized the homes of delinquent borrowers and broke state laws by employing so-called “robosigners”, workers who signed off on foreclosure documents en masse without reviewing the paperwork.

The FT, citing five people with direct knowledge of the discussions, said state prosecutors have proposed settlement language in the “robosigning” case that also might release the companies from legal liability for wrongful securitization practices.

The banks are pressing for immunity from a raft of alleged civil violations and have called the latest proposal a “non-starter.”

The two sides are due to meet again this week to iron out differences on any proposed deal, the article said. (Reporting by Stephen Mangan; editing by Carol Bishopric)

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