Obama Administration And Banks Near Deal On Mortgage Fraud Legal Liability
Posted: 1/27/12 12:19 PM ET | Updated: 1/27/12 07:04 PM ET
WASHINGTON — The Obama administration, state attorneys general, and, perhaps, the nation’s largest banks are close to a final settlement on the years-long struggle over allegations of massive foreclosure fraud, according to several sources familiar with the talks. And the final details of the arrangement, according to the source who revealed them, will apparently not preclude prosecutors and regulators from taking legal action against many of the common abuses during the house bubble. It remains to be seen whether all parties will ultimately sign off on the language.
The settlement is worth $25 billion, a sum which will be distributed to homeowners who were wrongfully foreclosed on as well as those who remain underwater. In addition, banks could still face future legal action over 12 specific violations.
According to someone intimate with the negotiations, there will be no legal release of the banks with respect to:
- Criminal liability.
- Tax liability
- Fair lending, fair housing, or any other civil rights claim.