Mortgage providers nearing $60 billion settlement with Department of Justice

July 06, 2011 10:07AM

America’s largest mortgage providers are nearing a deal with the Department of Justice and 50 state attorneys general to work out some “thorny” foreclosure issues, including robo-singing, the New York Post reported. A proposed settlement, scheduled to be announced in the next few weeks, could range as high as $60 billion and include provisions for principal reduction.

The agreement would form national and state funds for each of the states and settle most civil foreclosure claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.

Sources close to the action are wary of talks falling apart at the last moment as the state and bank representatives iron out small details, the Post said.

The massive payout would include restitution in addition to penalty contributions from banks to settle claims of sloppy or fraudulent mortgage practices.

“The banks are negotiating in good faith, and we’re making a lot of progress,” said Geoff Greenwood, a spokesman for Iowa AG Tom Miller. [Post]