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Major banks may ink $10bn settlement over home loans case

The US banking regulators are likely to sign a $10bn settlement with 14 major banks over their involvement in faulty foreclosure practices, including providing wrong paperwork and charging excessive fees.

As per terms of the settlement agreement, nearly $3.75m from the total settlement amount will be provided those who have already lost their homes, reports the New York Times.

Nearly $6bn will be go to the relief for homeowners, which will be utilized to reduce their principal, assisting them to refinance and donating abandoned homes.

The latest settlement would be potentially more than a broad pact agreed in February between state attorneys general and five large banks, which offered $1.5bn in cash relief.

The US federal agencies including the Securities and Exchange Commission (SEC) and the Justice Department are negotiating with the lenders for their packaging and sale of troubled mortgage securities that collapsed during the financial crisis.

JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and Ally Financial are the firms expected to ink the settlement.