Fannie Mae and Freddie Mac will let some borrowers who kept up payments as their homes lost value erase their debts by giving up the properties, helping Americans escape underwater loans while adding to losses at the mortgage giants bailed out with $190 billion of taxpayer money.
Bank of America Corp. faces increased pressure from two attorneys general to change its mortgage- servicing and foreclosure practices as states said the bank and four other servicers may face $17 billion in claims.
The U.S. Justice Department said it will announce the resolution of a 16-month nationwide probe of abusive foreclosure practices at banks including Citigroup Inc. and Wells Fargo & Co. after the collapse of the housing bubble.
Shoddy mortgage lending has led bankers into a two-front war, pitting them against U.S. homeowners challenging the right to foreclose and mortgage-bond investors demanding refunds that could approach $200 billion.
Massachusetts’s highest court is poised to rule on whether foreclosures in the state should be undone because securitization-industry practices violate real- estate law governing how mortgages may be transferred.