Mortgage, Lawsuit Settlement | featured news

A Manhattan federal judge on Monday signaled he will not rubber-stamp Citigroup Inc's proposed $590 million settlement of a shareholder lawsuit accusing it of hiding tens of billions of dollars of toxic mortgage assets.

Ten major banks and mortgage companies agreed Monday to pay $8.5 billion to settle federal complaints that they wrongfully foreclosed on homeowners who should have been allowed to stay in their homes.

Wells Fargo Bank will pay at least $175 million to settle accusations that it discriminated against African-American and Hispanic borrowers in violation of fair-lending laws, the Justice Department announced Thursday.

The U.S. government said on Thursday that the biggest U.S. banks will provide $25 billion in relief to distressed homeowners and states, as officials hold lenders responsible for taking illegal shortcuts during foreclosures and other mortgage paperwork.

The Justice Department is expected to announce Wednesday a settlement with Bank of America Corp. that resolves accusations that its Countrywide Financial unit engaged in discriminatory mortgage-lending practices, according to a person familiar with the matter.

JPMorgan Chase & Co, the second largest U.S. bank by assets, led a broader decline in bank share prices, as investors feared lenders face a growing list of lawsuits due to problem mortgages.

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.

Countrywide Home Loans agreed to pay borrowers $108 million for charging excessive fees when they fell behind on their mortgages.

Bank regulators announced settlements on Wednesday with the largest home lenders over allegations of shoddy foreclosure practices, but the pacts did not include financial penalties.