US banks face calls to pay into mortgage fund

US BANKS and a task force of the nation’s 50 state attorneys general are nearing a settlement of an investigation into the lending industry’s foreclosure practices.

A settlement would call for Bank of America Corp, JPMorgan Chase & Co and others to contribute money to a fund to assist borrowers who lost their homes to foreclosure and which would be administered by the regulators.

It would also involve a promise by banks to do away with “dual-track” modifications and foreclosures, a much-criticised practice in which they begin foreclosure proceedings before exhausting attempts to modify home loans, according to CNBC.

The task force is being led by Tom Miller, the attorney general of Iowa. A settlement might not be reached for at least one month, CNBC said.