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Thursday
Feb092012

Multi-Million Dollar Settlement over Foreclosure Abuses Near

iStockPhoto/Thinkstock(NEW YORK) -- Federal and state officials are near a multi-billion dollar settlement with five of the nation's biggest banks over foreclosure abuses that took place during the housing crisis, ABC News has learned.

The Department of Justice will hold a press conference at 10 a.m. Thursday to announce an agreement in principal.

At least 42 states have agreed to sign onto the agreement.  New York and California were among the last holdouts and it wasn't clear whether they will join or sue separately.

The deal is estimated to be $25 billion and would involve Wells Fargo, Bank of America, Citigroup, JPMorgan Chase and Ally Financial.

Some of the money would go towards foreclosure prevention measures, such as lowering the loan balance for homeowners who are underwater, while other provisions could lower interest rates.

Another chunk would be set aside to compensate people who lost their homes.  Those homeowners may may get payouts of up to $2,000.

The settlement comes after banks were found to have taken part in "robo-signing" to speed up foreclosures after the housing bubble burst.  The practice involved the mass signing documents without verifying the accuracy of the paperwork.

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