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Major mortgage servicers could face $17 billion in suits

May 25, 2011 |  1:50 pm

The nation's five largest mortgage servicers could face at least $17 billion in civil lawsuits if a settlement with the nation's 50 attorneys general is not reached, a person familiar with the matter said Wednesday.

A coalition of state attorneys general and other federal agencies, including the departments of Justice, Treasury and Housing and Urban Development as well as the Federal Trade Commission have been probing the foreclosure practices of the five largest mortgage servicers since the robo-signing scandal erupted late last year.

State attorneys general warned the nation's largest servicers -- Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. -- of their potential liability during negotiations in Washington on Tuesday, according to the person, who asked not to be named because negotiations are ongoing.

The figure -- which was reported first Tuesday night by the Wall Street Journal -- does not include additional billions of dollars in potential claims from federal agencies.

-- Alejandro Lazo

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