Five U.S. banks are facing a potential liability of at least $17 billion in civil lawsuits over foreclosures, The Wall Street Journal reports. The suits do not cover claims from federal agencies, such as the Department of Housing. The state and federal officials have accused mortgage companies for not hiring enough staff to provide assistance to millions of borrowers that have fallen behind on their mortgages.
The banks have proposed a $5 billion settlement that will be used to compensate any borrowers previously wronged in the foreclosure process and provide transition assistance for borrowers who are ousted from their homes. The U.S. Trustee Program, a part of the U.S. Department of Justice that oversees bankruptcy cases, has urged for an additional $500 million to $1 billion in penalties.
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