(A man exits the New York State Department of Financial Services Foreclosure Relief Unit in Brentwood, N.Y., on Feb. 10. The Federal Reserve announced the previous day that as part of the $25 billion foreclosure settlement agreed to by U.S. banks and government officials that it was imposing penalties totaling $766.5 million on five U.S. banks because of their mortgage-servicing practices.)
The $25 billion settlement between five large U.S. banks accused of abusive mortgage practices on the one side and federal and state government officials on the other side that was announced Feb. 9 will be filed in federal court on Monday, people familiar with the matter told Reuters late Friday.
Ally Financial Inc. (formerly known as GMAC), the Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., and Wells Fargo & Co. all agreed to the settlement after about 16 months of negotiations with state attorneys general and federal agencies, which include the U.S. Department of Housing and Urban Development and the U.S. Department of Justice.
The parties had hoped to file a settlement agreement on Friday, Reuters reported, but the deal was scuttled at the last minute because of a disagreement between the Bank of America and Nevada, people familiar with the matter said.
Details of the disagreement on Friday were unavailable, and representatives of the Bank of America and Nevada could not immediately be reached for comment after business hours, Reuters said.
The widely reported settlement of the mortgage-servicing case could result in payments and other mortgage relief for about 1 million borrowers, but it must be approved by a judge.
In the Justice Department announcement of the settlement on Feb. 9, HUD Secretary Shaun Donovan said, "This historic settlement will provide immediate relief to homeowners -- forcing banks to reduce the principal balance on many loans, refinance loans for underwater borrowers, and pay billions of dollars to states and consumers." Forty-nine of the 50 states agreed to the deal.
Details of the agreement are available at the National Mortgage Settlement online site.
RESOURCE IBTimes
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