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

UBS admits fraud in $1.5 billion Libor rigging settlement

1 of 2. A logo of Swiss bank UBS is seen on a building in Zurich December 18, 2012.

Credit: Reuters/Michael Buholzer

By Katharina Bart and Tom Miles

ZURICH | Wed Dec 19, 2012 1:28am EST

ZURICH (Reuters) - Swiss bank UBS was hit with a $1.5 billion bill and admitted to fraud on Wednesday in order to settle charges of manipulating global benchmark interest rates.

The penalty agreed with U.S., UK and Swiss regulators is more than three times the $450 million fine levied on Britain's Barclays in June for rigging the Libor benchmark rate used to price financial contracts around the globe.

It is the second-largest fine paid by a bank and comes a week after Britain's HSBC agreed to pay the biggest ever penalty - $1.92 billion - to settle a probe in the United States into laundering money for drug cartels.

"We deeply regret this inappropriate and unethical behavior. No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity," UBS Chief Executive Sergio Ermotti said in a statement disclosing the extent of the wrongdoing, which took place over six years from 2005 to 2010.

UBS said it will pay $1.2 billion to the U.S. Department of Justice (DoJ) and the Commodity Futures Trading Commission (CFTC), 160 million pounds to the UK's Financial Services Authority and 59 million Swiss francs from its estimated profit to Swiss regulator Finma.

The FSA said at least 45 people were involved in the rigging, which took place across a range of Libor currencies.

A similar admission by Barclays in June touched off a political firestorm that forced its chairman and chief executive to quit.

The Libor benchmarks are used for trillions of dollars worth of loans around the world, ranging from home loans to credit cards to complex derivatives.

Tiny shifts in the rate, compiled from daily polls of bankers, could benefit banks by millions of dollars. But every dollar a bank benefited meant an equal loss by a bank, hedge fund or other investor on the other side of the trade - raising the threat of a raft of civil lawsuits.

The steep fine for UBS is despite the bank, since 2011, cooperating with law-enforcement agencies in their probes. The bank said it received conditional immunity from some regulators.

UBS has had a tough 18 months after suffering a $2.3 billion loss in a rogue trading scandal, management upheaval and thousands of job cuts.

(Additional reporting by Martin De'Sapinto, Huw Jones; Sarah White; Steve Slater; Writing by Alexander Smith; Editing by Carmel Crimmins)

View the original article here