Major banks close to big settlement on home loans

n">(Reuters) - U.S. regulators are close to securing another multibillion-dollar settlement with the largest banks to resolve allegations that they unlawfully cut corners when foreclosing on delinquent borrowers, a source familiar with the talks said.

The settlement with five big banks would be part of a larger deal that the Office of the Comptroller of the Currency hopes will include 14 banks and total about $10 billion, the source said.

Such a settlement would address an outstanding issue that was left unsettled after the $25 billion deal that the banks reached in February with the Justice Department, housing authorities, and state attorneys general.

In 2011, the OCC had separately required the big banks to "look back" and compensate borrowers wrongfully foreclosed upon in 2009 and 2010. It appears that the case-by-case analysis is proving too cumbersome, and the banks are instead opting for a lump-sum settlement.

The top five mortgage lenders -- Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co, Citigroup Inc and Ally Financial Inc -- may reach a deal in the coming days, the source said.

The largest banks would pay the majority of the $10 billion target. That money would be paid out to a group of borrowers foreclosed upon during the period of time covered by the review, said the source, who was not authorized to speak publicly.

The OCC and the banks are still negotiating how to calculate individual payouts, the source said, adding that regulators will give the banks credit for compensation they have already given borrowers as part of ongoing foreclosure reviews.

The New York Times first reported the pending deal.

"The Office of the Comptroller of the Currency is committed to ensuring the Independent Foreclosure Review proceeds efficiently and to ensuring harmed borrowers are compensated as quickly as possible," the OCC said in a statement.

Ally, Wells Fargo, JPMorgan, Bank of America and Citigroup declined to comment.

(Reporting by Aruna Viswanatha, with additional reporting by Sakthi Prasad, Rick Rothacker and Douwe Miedema; Editing by Leslie Gevirtz)

View the original article here

IMF extends zero interest loans to poor nations

WASHINGTON | Fri Dec 21, 2012 1:22pm EST

WASHINGTON (Reuters) - Poor countries with loans from the IMF can continue to pay no interest until the end of 2014, the Fund's board said on Friday, as their economies are still recovering from the global economic crisis.

The IMF's zero-interest loan program for low-income countries had been set to expire at the end of this year.

"The executive board decision to keep interest rates at zero ... is testament to the Fund's continued support for low-income countries since the global economic crisis hit in 2009," IMF Managing Director Christine Lagarde said in a statement.

The IMF decided in 2009 to allow countries eligible for its anti-poverty loan program to pay zero interest on loans in light of the financial crisis.

The Fund also set a target to raise $17 billion to lend to the poorest countries, which are threatened by the risk of euro-zone contagion and by a drop-off in foreign aid after the global recession.

IMF's Lagarde has pushed to meet that goal, seeking to ease concerns that the IMF and donor nations may turn a blind eye to the world's poor as they focus on containing the euro zone crisis.

In September, the IMF said it would distribute a $3.8 billion windfall from gold sales to its 188 member countries if they agreed to commit most of the money to the anti-poverty loan program.

(Reporting by Anna Yukhananov; Editing by Peter Galloway)

View the original article here