[QODLink]
Americas

US banks pay billions to settle mortgage mess

A group of US banks agree to pay more than $19bn to settle complaints stemming from 2008 mortgage crisis.
Last Modified: 08 Jan 2013 13:13

A group of 10 mortgage providers have agreed to pay a total of $8.5bn as compensation to end a US government-mandated review of housing crisis foreclosures.

Bank of America Corp, Citigroup Inc, JPMorgan Case & Co, Wells Fargo & Co, MetLife Bank and five others will pay $3.3bn directly to eligible borrowers, and $5.2bn in loan modifications and forgiveness, regulators said.

A total of 3.8 million people are eligible for payments under the deal announced by the Office of Comptroller of the Currency, a bank regulator, and the Federal Reserve. Those payments could range from a few hundred dollars to up to $125,000.

The settlement is a response to charges of "robo-signing": Big banks, swamped with thousands of foreclosure filings, allegedly used an automated system to sign off on foreclosures, rather than personally reviewing each case. 

Thousands of homeowners said they were wrongly evicted from their homes because of the practice.

Separately, Bank of America agreed to pay $11.6bn to government-backed mortgage financier Fannie Mae to settle claims related to mortgages that soured during the housing crash.

Many of those mortgages were originated by Countrywide Financial, which was the largest subprime mortgage lender in the United States. Bank of America acquired Countrywide in 2008.

The agreements come as US banks are showing renewed signs of financial health, extending their recovery from the 2008 crisis.

But critics say the deal allows the banks to escape responsibility for damages that could have cost them much more, perhaps hundreds of billions of dollars.

250

Source:
Al Jazeera
Topics in this article
People
Country
City
Organisation
Featured on Al Jazeera
The author argues that in the new economy, it's people, not skills or majors, that have lost value.
Colleagues of detained Al Jazeera journalists press demands for their release, 100 days after their arrest in Egypt.
Mehdi Hasan discusses online freedoms and the potential of the web with Wikipedia founder Jimmy Wales.
A tight race seems likely as 814 million voters elect leaders in world's largest democracy next week.
Featured
A vocal minority in Ukraine's east wants to join Russia, and Kiev has so far been unable to put down the separatists.
Iran's government has shifted its take on 'brain drain' but is the change enough to reverse the flow?
Deadly attacks on anti-mining activists in the Philippines part of a global trend, according to new report.
Activists say 'Honor Diaries' documentary exploits gender-based violence to further an anti-Islamic agenda.
As Syria's civil war escalates along the Turkish border, many in Turkey are questioning the country's involvement.
join our mailing list