Reuters: Regulatory News: Major banks close to $10 bln settlement on home loans - NYT

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Major banks close to $10 bln settlement on home loans - NYT Dec 31st 2012, 04:07 Sun Dec 30, 2012 11:07pm EST Dec 31 (Reuters) - U.S. regulators are nearing a $10 billion settlement with several banks that would end the government's efforts to hold lenders responsible for faulty foreclosure practices, the New York Times reported, citing people with knowledge of the talks. Under the settlement currently being discussed, about $3.75 billion would go to people who have already lost their homes, the New York Times said. The latest settlement would be potentially more than a broad pact agreed in February between state attorneys general and five large banks. That set aside $1.5 billion in cash relief. In February, Bank of America Corp, Wells Fargo & Co , JPMorgan Chase & Co, Citigroup Inc and Ally Financial Inc agreed to a $25 billion government settlement to release them from claims over faulty foreclosures and the mishandling of requests for loan modifications. The New York Times said 14 banks are now involved in the latest settlement talks with the U.S. authorities, including the five that had agreed to a similar settlement in February. The paper did not name other banks. () A deal could be reached by the end of the week between the 14 banks and the nation's top banking regulators, led by the Office of the Comptroller of the Currency, four people with knowledge of the negotiations told the newspaper. As per the settlement being negotiated, $6 billion would come from banks to be used for relief for homeowners, including reducing their principal, helping them refinance and donating abandoned homes, the New York Times said. Also, the banks will have to hire independent consultants to comb through loan records to determine whether the banks illegally charged fees, forced homeowners to take out costly insurance or miscalculated loan payment amounts, according to the newspaper. Wells Fargo spokesman Ancel Martinez had no immediate comment on the New York Times report when contacted by Reuters, while JPMorgan spokesman Joseph Evangelisti declined to comment. None of the other banks named in the report could immediately be reached for comments by Reuters outside of regular U.S. business hours. Link this Share this Digg this Email Reprints

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