Ten major banks have agreed to pay more than $8.5 billion in a settlement with federal regulators over lenders' past mistakes in processing foreclosures.
About $3.3 billion of the settlement is to help 3.8 million eligible homeowners who were foreclosed upon in 2009 and 2010. About $5.2 billion of the settlement will then be provided in assistance to homeowners struggling financially, such as through mortgage modifications. Eligible borrowers will be contacted by the end of March.
The 10 mortgage companies involved in the latest settlement include Bank of America, Wells Fargo, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Aurora.
Banks have been accused of filing faulty paperwork, foreclosing on mortgages they didn't own, failing to provide proper notice of default, and foreclosing while a borrower was under a loan modification plan.
The settlement is separate from a $25 billion mortgage settlement last year between five of the nation's largest banks and attorneys general from 49 states.