DOJ Widens Scope of Settlement to Resolve Mortgage Abuses

The U.S. Department of Justice is surveying nationally chartered banks to gauge their interest in joining a wide-ranging settlement resolving mortgage abuses.

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State and federal officials are nearing mortgage-related settlement with Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), Citigroup (NYSE:C), and Ally Financial (NYSE:ALLY-B).

The settlement would resolve allegations of misconduct in processing foreclosures, among other issues, with banks paying $20 billion to $25 billion in relief to distressed homeowners.

DOJ officials have approached several other banks about joining the settlement in recent weeks in a move that could push up the potential price tag.

Banks being approached include HSBC Holdings Plc (NYSE:HBC), PNC Financial Services Group (NYSE:PNC), MetLife (NYSE:MET), SunTrust Bank (NYSE:STI), U.S. Bancorp (NYSE:USB), OneWest Bank, Sovereign Bank, and Aurora Bank — all of which entered into consent orders last year with U.S. bank regulators over similar allegations to those addressed by the settlement.

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To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

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