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U.S. Banks Reportedly Offered Deal On Improper Mortgage Practices

Bank Of America

First Posted: 09/06/11 08:59 AM ET Updated: 11/06/11 05:12 AM ET

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.

A spokesman for Iowa Attorney General Tom Miller, who is leading states' negotiations with the banks, denied any deal has been offered on securitization.

"We do not intend to release any aspect of securitizations," said Geoff Greenwood, Miller's spokesman.

The banks are pressing for immunity from a raft of alleged civil violations and have called the latest proposal a "non-starter."

The two sides are due to meet again this week to iron out differences on any proposed deal, the article said.

(Reporting by Stephen Mangan in London and Dave Clarke in Washington D.C.; Additional reporting by Sakthi Prasad in Bangalore; Editing by Matt Driskill)

Copyright 2011 Thomson Reuters. Click for Restrictions.

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