WASHINGTON – Ten major banks and mortgage companies have agreed to pay $8.5 billion to settle complaints that they wrongfully foreclosed on homeowners who should have been allowed to stay in their homes.
Federal Regulators say the banks will pay billions 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.
Under the settlement, people who were wrongfully foreclosed on could receive from a few hundred dollars up to $125,000.
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.