Banks to pay New York State $25m over foreclosure

14 March 2012

Five major US banks have agreed to pay $25 million in damages to New York State following the mortgage foreclosure practice scandal.

Bank of America, Wells Fargo, Citigroup, JPMorgan Chase & Co and Ally Financial will meet this combined figure in order to resolve a proportion of the monetary claims filed against them on the grounds of their improper home loan practices.

Under the terms of an agreement reached last month, the five groups will pay a total of $25 billion in compensation to the 49 states affected by the foreclosure issues and this instalment to New York has now been finalised.

Wells Fargo, Bank of America, Citigroup and JPMorgan will all pay $5.9 million each, while Ally faces a smaller penalty of $1.25 million.

Speaking to Bloomberg, Danny Kanner - spokesman for New York attorney general Eric Schneiderman, who brought about this legal action - insisted this is not the end of the process.

"We intend to aggressively litigate this case to finally prohibit the widespread illegal and deceptive practices of the banks set forth in our complaint," he asserted.

By Tony Aynsley

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