Fed Holds Up $10 Billion Fraudclosure Pact With Banks, OCC
Fed Holds Up $10 Billion Mortgage Pact With Banks, OCC
The largest U.S. banks and the Office of the Comptroller of the Currency have agreed to a $10 billion settlement that would halt a lengthy review of thousands of foreclosure cases, according to people familiar with the discussions. But a final deal is being held up by the Federal Reserve, the people said.
The banks and the OCC would like to wrap up a pact as soon as this weekend, these people said, ahead of the release of 2012 results starting next week. The terms under discussion would have 14 large banks pay a total of $3.75 billion in cash and the balance in other forms of borrower relief, these people said.
It is unclear why the Fed has yet to sign off on the deal, which would potentially compensate borrowers who went through foreclosures in 2009 and 2010. The Fed declined to comment.
The Fed and the OCC have disagreed about exactly how payments to consumers under the settlement would be determined, said two people familiar with the talks. Two members of Congress on Friday urged regulators not to rush into a deal.
A person familiar with the negotiations said the deal was also facing opposition from smaller banks that say the terms favor larger lenders, which could face billions of dollars in costs if a deal doesn’t take place.