US mortgage settlement nears agreement

Washington: Some of America’s biggest banks are said to be close to agreeing a multi-billion dollar settlement with the US government.

It follows allegations of abusive practices by lenders during the country’s housing collapse.

The deal, with the Obama administration and almost all US state governments, is reported to be worth at least $25bn.

Much of that will go towards reducing mortgage payments of home-owners who were the victims of improper practices.

After a year of legal wrangling, an agreement appears to be imminent.

And if the figures being talked about are correct, it would be one of the biggest ever settlements between the US government and a single industry.

Debt reduced

Five banks are expected to sign up: Bank of America, Citigroup, Wells Fargo, JP Morgan Chase and Ally Financial.

They were accused of systematically abusing borrowers during America’s worst housing slump since the Great Depression.

The banks allegedly sought to repossess homes using documents that were incorrect and, in some cases, falsified.

By settling, they will avoid civil lawsuits, and 750,000 people who lost their homes will each receive compensation of $2,000.

About a million more customers will see their mortgage debt reduced or refinanced.

Source: BBC