Bloomberg reported that Bank of America Corp., JPMorgan Chase & Co., Wells Fargo, Citigroup and Ally Financial (GMAC) reached a $25 billion settlement with 49 states and the federal government related to abusive foreclosure practices in the wake of the collapse of the housing market.
 
The named banks have committed $20 billion in various forms of mortgage relief plus payments of $5 billion to state and federal governments.
 
The $25 billion agreement includes $1.5 billion in payments to roughly 750,000 borrowers who lost their homes to foreclosure. About $17 billion will pay for mortgage debt forgiveness, forbearance, short sales and other assistance to homeowners. Servicers will also provide $3 billion in refinancing to lower homeowners’ interest rates.

According to the report, Bank of America has committed as much as $11.8 billion, including a cash payment of $3.24 billion, according to a government fact sheet. The balance will be applied toward mortgage modifications and other benefits for borrowers. Wells Fargo has committed as much as $5.35 billion; JPMorgan $5.29 billion; Citigroup $2.2 billion; and Ally $310 million.
 
Per the report, the total settlement could grow to $40 billion if nine additional large mortgage servicers sign on to the agreement, according to an administration official who briefed reporters on condition of anonymity before the
announcement.