A federal judge approved a $25 billion mortgage settlement with five top U.S. banks over allegations of foreclosure abuses and misconduct in servicing home loans, according to court documents.
U.S. District Judge Rosemary Collyer signed the previously announced series of settlements on Wednesday but the approval was not made public until Thursday. The civil allegations were brought by 49 states and the federal government. The banks did not admit to the accusations.
The five banks: Bank of America; Citigroup, JPMorgan Chase; Wells Fargo and Ally Financial agreed to pay around a total of $5 billion in cash to the federal and state governments.
They also agreed to cut mortgage debt amounts and restructure troubled loans from the pool of loans they service, to meet the rest of their monetary obligations under the settlement.
The government had said its intention was to "remediate harms allegedly resulting from the alleged unlawful conduct. The deal faced criticism from investors in mortgage-backed securities, who worried they could be financially harmed by mortgage writedowns and other modifications.
The Association of Mortgage Investors, a trade group that represents investors with interests in mortgage securities, had said they planned to ask for changes to the settlement, but did not file a formal challenge in court. A spokesman for the group declined immediate comment.
Citigroup said in a statement it has been taking calls from customers since March 1 for its program and has moved "a few hundred" cases into the pipeline to determine whether they qualify.
"Assisting distressed homeowners remains CitiMortgage's number one priority," the bank said. The other banks did not immediately respond to requests for comment.