US Cuts $8.5 Billion Deal

(CN) - Ten mortgage servicers agreed today to pay $8.5 billion to settle federal regulators' accusations of foreclosure abuses.

The settling banks include Bank of America, Citigroup, JP Morgan and Wells Fargo. They agreed to pay $3.3 billion to homeowners and another $5.2 billion in loan modifications and forgiveness, according to wire reports.

Federal regulators said they agreed to the deal to get homeowners quick relief.

But Pulitzer Prize-winning reporter Gretchen Morgenson wrote in her New York Times column on Sunday, before the deal was officially announced, that Uncle Sam was settling on the cheap, knuckling under to banks.

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