Housing Lenders to Pay Billions for Blowing Bubble; 10 Banks Hit for Bad Loans, Faulty Foreclosures

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Byline: Tim Devaney, THE WASHINGTON TIMES

The U.S. banking industry suffered two big hits Monday stemming from the collapse of the housing bubble, with 10 banks and mortgage lenders agreeing to pay $8.5 billion in a settlement with federal regulators, while Charlotte, N.C.-based Bank of America agreed to a separate settlement with Fannie Mae over bad housing loans that its controversial lending subsidiary sold to the federal housing finance giant.The 10 major banks and mortgage lenders, including Bank of America Corp., stood accused of prematurely foreclosing on homeowners and agreed to the settlement worked out with the Federal Reserve and Office of the Comptroller of the Currency.Bank of America agreed to pay $10.3 …