REPORT: Big Banks Offered Fraud Settlement Deal
Notice the bold type in the final paragraph. This is a new development.
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(Reuters) - 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 talks aim to settle allegations that banks including Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, seized the homes of delinquent borrowers and broke state laws by employing so-called "robosigners," workers who signed off on foreclosure documents en masse without reviewing the paperwork.
The FT, citing five people with direct knowledge of the discussions, said state prosecutors have proposed settlement language in the "robosigning" cases that also might release the companies from legal liability for wrongful securitization practices.
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