Housing Market, 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.

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.

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.

Citigroup said on Wednesday that it had agreed to pay $590 million to settle a class action lawsuit brought by shareholders who contended that they had been misled about the bank’s exposure to subprime mortgage debt on the eve of the financial crisis.

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.

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.

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.

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.