Housing Market, Mortgage | featured news

Big U.S. banks in talks with state prosecutors to settle claims of improper mortgage practices have been offered a deal that may limit their legal liabilities in return for a multibillion-dollar payment, the Financial Times reported on Tuesday.

The U.S. regulator for Fannie Mae and Freddie Mac accuses the banks of negligence in misrepresenting the risks embedded in the securities sold to the home-finance giants.

The agency that oversees mortgage markets is preparing to file suit against more than a dozen big banks, accusing them of misrepresenting the quality of mortgages they packaged and sold during the housing bubble, The New York Times reported on Thursday.

Bank of America Corp is looking to sell its correspondent mortgage business and the unit's employees could be notified as soon as Wednesday, the Wall Street Journal said, citing people familiar with the matter.

The Obama administration is considering unveiling new plans next week to revive the ailing housing market and reduce foreclosures, including an effort to help troubled borrowers refinance their mortgages.

While it's cheaper to buy than to rent in most of America's big cities, access to mortgages is tough in the wake of tighter credit standards from banks.

It's an ominous sign for housing. The percentage of homeowners who have missed at least one mortgage payment has risen for the second straight quarter, the Mortgage Bankers Assn. says.

The average rate on a 30-year fixed mortgage has fallen to its lowest level on records dating to 1971.

The Wall Street Journal is reporting that Bank of America has agreed to sell a portion of its home loan portfolio to Fannie Mae. The Journal said the deal to sell a pool of 400,000 loans to the government-sponsored mortgage holder was finalized last Friday.

Mortgage finance giant Freddie Mac FMCC.OB said on Monday it would ask for an additional $1.5 billion from taxpayers due to losses stemming from the weak housing market.