Foreclosure, Lawsuit Settlement | featured news

Relief checks issued as part of a settlement over foreclosure abuses have bounced, an unfortunate twist for consumers who have already faced problems over reviews of troubled mortgage loans.

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.

A $10 billion settlement to resolve claims of foreclosure abuses by major lenders is expected to be announced on Monday, several people with knowledge of the discussions said.

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.

California's attorney general said on Thursday her state will receive up to $18 billion in benefits under a federal-state mortgage settlement to be announced later today.

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.