The US government and 49 state prosecutors have struck an agreement with five of the nation’s leading banks worth up to $40bn to resolve allegations that the institutions systematically abused borrowers in their pursuit of improper home seizures.
The banks were accused of using false documents and cutting legal corners when repossessing delinquent borrowers’ homes in a scandal that created a public uproar.
The settlement may represent the government’s largest borrower-aid programme to date, and could be the White House’s last chance this year to deliver relief to borrowers at a time when home prices are falling and Congress refuses to spend more money to help them.
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