The nation's five biggest mortgage lenders are anticipating paying at least $20 billion in order to make nice on allegations of foreclosure abuse. Based on recent conversations he's been leading with the banks, associate U.S. Attorney General Tom Perrelli, says that Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial are all realizing that the $5 billion figure they all floated in May would not be enough to end the probe. According to Shahien Nasiripour at The Huffington Post, Perrelli explained the situation to a bipartisan group of state officials based on recent conversations with each of the firms, and more than anything, the banks--as well as top administration officials like Tim Geithner--are looking for a quick resolution.
The $20 billion figure actually matches what The Wall Street Journal originally reported that federal had proposed last month when talks of a settlement began. The investigation itself started last month after widespread reports that the top mortgage firms illegally seized homes and possibly lied to local judges in expediting the foreclosure process. The money would go into a fund that would be used to pay back borrowers that the banks had scammed during the mortgage crisis and help those kicked out of their homes to find a new place to live. As The Journal reported in May, the settlement deal must satisfy not only the Department of Justice officials overseeing the conversations but also state attorneys general, the Department of Housing and Urban Development as well as the Federal Trade Commission.