A federal judge has approved the $25 billion national joint federal-state settlement with five top U.S. banks over mortgage foreclosure abuses and fraud and unacceptable nationwide mortgage servicing practices.
According to court documents, U.S. District Judge Rosemary Collyer in Washington signed consent judgments with the banks.
Under the settlement reached with the federal government and 49 states, the five banks -- Bank of America Corp. (BAC: Quote), JPMorgan Chase & Co. (JPM: Quote), Wells Fargo & Co. (WFC: Quote), Citigroup Inc. (C: Quote) and Ally Financial Inc. -- have agreed to a $25 billion penalty under a joint state-national settlement structure.
As per the settlement structure, the banks have committed a minimum of $17 billion directly to borrowers through a series of national homeowner relief effort options, including principal reduction. The have committed another $3 billion to an underwater mortgage refinancing program. The banks will also pay $5 billion to the states and federal government - $4.25 billion to the states and $750 million to the federal government.
The settlement was announced in February.
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by RTT Staff Writer
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