10 banks agree to pay $8.5B for foreclosure abuse - WKOW 27: Madison, WI Breaking News, Weather and Sports

10 banks agree to pay $8.5B for foreclosure abuse

WASHINGTON (WKOW) -- Ten major banks and mortgage companies announced an $8.5 billion settlement over alleged foreclosure abuses.

Under the agreement, the banks will provide more than $3 billion in direct payments to wronged borrowers and more than $5 billion in mortgage assistance. People who were wrongfully foreclosed on could receive from a few hundred dollars up to $125,000.

Federal Regulators say the banks will pay the money to homeowners to end a review process of foreclosure files that was required under a 2011 enforcement action. The banks mishandled people's paperwork and skipped required steps in the foreclosure process.

Advocates estimate that about 400,000 homeowners would be eligible for compensation under the settlement with the Federal Reserve and Office of the Comptroller of the Currency.

Banks involved in the settlement include Bank of America, Citigroup, JPMorgan Chase and Wells Fargo.

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