Real Estate, Foreclosure Probe | 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.

As the nation's five largest mortgage lenders edge close to a $25 billion settlement over foreclosure abuses, it's becoming clear that the deal will have little or no impact on their future bottom lines.

JPMorgan Chase & Co has pushed out its head of home lending, David Lowman, who was sidelined in February after the bank racked up billions of dollars in losses on soured mortgages and became mired in litigation over a wave of foreclosures.

The nation's largest mortgage companies are operating on the assumption that they will have to pay as much as $20 billion to resolve claims of widespread foreclosure abuse, an amount four times what they had originally proposed, the top federal official overseeing the discussions told state officials Monday, according to people who participated in the conversation.

The Federal Reserve chairman says the review is 'seeking to determine whether systematic weaknesses are leading to improper foreclosures.'

Officials in 49 states have launched a joint investigation into allegations that mortgage companies mishandled documents and broke laws in foreclosing on hundreds of thousands of homeowners.