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Thursday
Feb092012

Feds Announce $25B Foreclosure Abuse Deal

Office of the Maine Attorney General(WASHINGTON) -- Government officials announced on Thursday a record $25 billion settlement with the five biggest banks related to foreclosure abuses, including "robo-signing" of documents.

Among the money allocated will be $1.5 billion distributed nationwide to about 750,000 borrowers who lost their homes to foreclosure. The deal is the largest multi-state settlement since the Tobacco Settlement in 1998, the Department of Justice said.

Five banks -- Wells Fargo, Bank of America, Citigroup, JPMorgan Chase and Ally Financial -- will also have to "work off up to $17 billion in principal reduction and other forms of loan modification relief nationwide," and "provide up to $3 billion in refinancing relief nationwide," according to the settlement.

Attorney General Eric Holder said the deal by 49 state attorneys general, who worked late into the hours of Wednesday night, does not preclude states from pursuing their own suits against the banks.

Holder announced further terms of the deal would be on a website, NationalMortgageSettlement.com, and residents of the states involved should visit the sites of their respective attorneys general.

Department of Housing and Urban Development Secretary Shaun Donovan said the settlement holds banks accountable for abuses against homeowners, which "continued long after people got the keys to their new home."

"No more lost paperwork, no more excuses, no more rhetoric," Donovan continued.

Donovan said the investigation comprised at least 15,000 hours of reviewing thousands of files of Federal Housing Administration insured loans.

Copyright 2012 ABC News Radio







ABC News Radio