$10 billion foreclosure settlement deals likely today
07 January 2013
Banks and regulators in the US were closeted in talks late yesterday over a nearly $10-billion settlement that would halt a much-maligned programme to review foreclosures from the height of the housing crisis, the Los Angeles Times said citing four people familiar with the talks.
The talks saw participation of at least 14 banks, according to the newspaper. Since the start of the reviews in late 2011, the banks had paid $1.5 billion to consultants going through foreclosure records -- but aggrieved borrowers had not received a penny.
An announcement of the new agreement was to be made as early as morning by the Office of the Comptroller of the Currency, the arm of the treasury department that regulates banks with national charters, the newspaper said, quoting four people familiar with the negotiations.
The people asked not to be identified given the sensitive nature of the discussions and the fact that they were incomplete. Among the principal negotiators were six big banks providing customer service on 90 per cent of all US home loans: Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co, Citigroup Inc, US Bancorp and PNC Financial Services.
The deal was being presented by regulators late yesterday to eight smaller mortgage services that had agreed to the reviews in 2011 but had less involvement in the settlement negotiations.
The settlement would follow weeks of negotiations between federal regulators and the banks, and would cover abuses, including flawed paperwork and botched loan modifications, The New York Times reported citing people who spoke on condition of anonymity because the deal had not been made public.