Mortgage Fraud, Lawsuit | featured news

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.

Massachusetts' top lawmaker has sued five top U.S. banks for allegedly foreclosing illegally on homes in the state and for deceptive loan servicing, including robo-signing.

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.

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 insurer AIG is suing Bank of America Corp to recover more than $10 billion of losses from a "massive fraud" on mortgage debt, deepening the morass of litigation faced by the largest U.S. bank.