More banks contacted in mortgage abuse settlement

As the government nears a deal with top U.S. banks to resolve mortgage abuses, the Justice Department has begun reaching out to other banks to gauge their interest in joining the wide-ranging settlement, Reuters reports.

The DOJ has contacted several nationally chartered banks to determine whether they might agree to terms similar to those in the proposed deal, the person said.

State and federal officials are nearing a settlement with the five largest mortgage servicers – Bank of America Corp, JPMorgan Chase & Co, Wells Fargo & Co, Citigroup Inc and Ally Financial Inc- to resolve allegations of misconduct in processing foreclosures and other issues.

In exchange for between $20 billion to $25 billion in relief to distressed homeowners, the banks will put behind them potential government lawsuits about improper foreclosures and abuses in originating and servicing the loans, according to Reuters.