Big Banks Closing in on $25 Billion Mortgage Settlement

[Stocks-to-Watch]

A massive settlement agreement between big banks and U.S. states over bank foreclosure practices has gone to the states for review, and it could be settled within weeks.

The deal would usher in landmark reforms and could make it easier for homeowners under threat of foreclosure to renegotiate their mortgages. Sources tell the Associated Press that it could put an average of $1,800 into the pockets of people whose homes may have been improperly foreclosed upon, and about 1 million homeowners could see their loans get reduced. The settlement applies to mortgages held by private institutions (not Fannie and Freddie) and issued between 2008 and 2011, the AP says.

For banks, a deal could remove one of the legal controversies that have concerned investors and held the stocks back. The settlement would include Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C) and Ally Financial.



Original Article Source by Barrons.com