Amazon offers free digital versions of purchased CDs

SAN FRANCISCO (Reuters) - Amazon.com Inc, taking aim at Apple's dominant iTunes store, on Thursday unveiled a service that it hopes will boost digital music sales and encourage more people to use its Cloud music service.
Amazon launched Amazon AutoRip, which gives customers free digital versions of music CDs they purchase from the world's largest Internet retailer.
The digital music files are automatically stored in customer libraries in remote datacenters run by Amazon, where they are available to play or download immediately through the company's Cloud Player service, the company said.
Amazon customers who have bought AutoRip-eligible CDs at any time since the company started selling discs in 1998 will also get digital versions of that music stored in their Cloud Player libraries for free, the company added.
Amazon's MP3 digital music business has been around since 2007, but its market share is less than 15 percent, according to The NPD Group. Apple Inc's iTunes store is the clear leader, with over 50 percent of the market.
The move sparked speculation that Amazon may be able to do the same for books, making Kindle ebook copies of physical titles.
"It would even be profitable for Amazon.com to pay publishers a subsidy to transition all the books purchased on Amazon.com to Kindle books," said Scott Devitt, an analyst at Morgan Stanley. "Having a digital library that is accessible only on the Kindle platform essentially locks a customer into the Kindle ecosystem forever.
"If executed, it would possibly be the largest coup in company history," he added.
An Amazon spokeswoman did not respond to an e-mail seeking comment on Thursday afternoon about a book version of AutoRip.
More than 50,000 albums are available for AutoRip. Steve Boom, head of digital music at Amazon, said the company focused on music that has been the most popular among its customers during the past 15 years.
Albums include "21" by Adele; "Overexposed" by Maroon 5; "Dark Side of the Moon" by Pink Floyd and "Thriller" by Michael Jackson.
Boom declined to estimate how many CDs Amazon expects to digitize through the new service. However, he noted that the company has sold hundreds of millions of CDs to millions of customers.
"When we picked those 50,000 titles we focused on having a substantial majority of our physical CD sales covered," he added. "People will be exposed to Cloud Player and our digital music offering, which is a good thing," Boom said. "We want to take this global."
Amazon is making a bigger push against iTunes now that the company's Kindle Fire tablets are in more consumers' hands and its Cloud Player music application is available on a range of other mobile devices, including Apple's iPhone, iPad and iPod Touch.

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Academy Launches Oscar App on Android, Amazon

LOS ANGELES (TheWrap.com) - The Academy launched its official Oscars app on Android and Amazon on Thursday, expanding its initiative to direct fans' attention from the television to the second screen.
The app, already available on the iPad and iPhone, was made available for free on the Google Play store and the Amazon app store, the Academy said. According to iTunes, the iPad app was updated earlier on Wednesday.
Developed by the Academy and Disney/ABC Television Group's digital media arm, the app allows users to see behind-the-scenes videos and stories with host Seth MacFarlane and search information about the nominees. It also features a "My Picks" ballot on which users can organize their dream-team of winners.
On Oscar night on February 24, the app will feature "Backstage Pass," a live telecast from more than a dozen cameras placed on the Red Carpet and throughout the Dolby Theatre - in the press room, the control room, backstage and elsewhere.
And a ticker on the app will notify when a users' favorite actor and actress arrives on stage.
"We're always looking for ways to bring fans closer to the show and this app provides a unique and fun way to do that," Josh Spector, the managing director of digital media and marketing for the Academy, said in a statement. "More fans than ever will be able to enjoy the full Oscar experience now that our app is available to Droid users."

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Three witnesses won't be charged in Ohio football rape case: documents

(Reuters) - At least three members of a high school football team in Steubenville, Ohio, received word they would not be prosecuted just days before testifying against teammates accused of raping a 16-year-old girl, according to documents obtained by Reuters.
In letters from Ohio Attorney General Mike DeWine's office addressed to each student's lawyer, the state committed to not prosecuting Evan Westlake, Anthony Craig and Mark Cole, three witnesses for the prosecution.
But DeWine said on Thursday his office had made no deal with any of the witnesses involved in the case.
"We have offered nothing, made no promises to any witness in this case. ... No deals have been cut with anybody," DeWine told WTOV television in comments confirmed by his spokesman.
The case has unsettled Steubenville, a city of 19,000 near the Pennsylvania border where football has a powerful influence.
Community leaders have criticized authorities, voicing suspicion they have avoided charging more players who could have been involved in order to protect the school's beloved football program.
Days after the letters were sent, all three players testified at a pre-trial hearing against teammates Ma'lik Richmond and Trenton Mays, both 16, who were charged with raping a classmate at a party attended by many teammates last August. Richmond and Mays were set to be tried as juveniles in February.
Although evidence in the criminal case showed each player "may not have conducted himself in a responsible or appropriate manner, his behavior did not rise to the level of any criminal conduct," all three letters say. "Therefore, we will not prosecute your client for his actions on August 11-12, 2012."
Walter Madison, an attorney who represents one of the students charged with rape, verified the letters' authenticity, but declined to comment further.
The letters can protect the players from criminal charges, said John Burkoff, a criminal law professor at the University of Pittsburgh.
"If the government says that it won't prosecute you and then changes its mind, you can argue that it can't go back on that," he said. "It's constitutional estoppel (an impediment)."
The letter to Westlake, dated September 28, was signed by Ohio Associate Attorney General Marianne Hemmeter. The other two letters were signed by Ohio Associate Assistant Attorney General Jennifer Brumby and dated October 9, three days before the trio testified against their teammates. Brumby and Hemmeter conducted the questioning at that hearing.
Attorney General spokesman Dan Tierney said the state decided the students would go uncharged only for the crime of illegal use of a minor in nudity-oriented material.
"We would stand by the attorney general's previous comments," he told Reuters on Thursday.
The case shot to national prominence last week when the online activist group Anonymous made public a picture of the purported rape victim being carried by her wrists and ankles by two young men. Anonymous also released a video that showed several other young men joking about an assault.

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Wall Street gains as earnings flow in; Boeing up

NEW YORK (AP) — Stocks rose on Wall Street Wednesday after U.S. corporate earnings reports got off to a good start.
The Dow Jones industrial average climbed 61.66 points to 13,390.51, its first gain of the week. The Standard & Poor's 500 index gained 3.87 points to 1,461.02, and the Nasdaq composite rose 14 to 3,105.81.
Having rallied after a last-minute resolution stopped the U.S. from going over the "fiscal cliff," stocks are facing their first big challenge of the year as companies start to report earnings for the fourth quarter of 2012. Throughout last year, analysts cut their outlook for earnings growth in the period and now expect them to rise by 3.21 percent, according to data from S&P Capital IQ.
"Maybe earnings expectations were a little too low," said Ryan Detrick, a strategist at Schaeffer's Investment Research. "You don't need to have great earnings, you just need to beat those expectations" for stocks to rally, Detrick said.
Early indications were decent. Aluminum maker Alcoa reported late Tuesday that it swung to a profit for the fourth quarter, with earnings that met Wall Street's expectations. The company brought in more revenue than analysts had expected, and the company also predicted rising demand for aluminum this year as the aerospace industry gains strength. Alcoa is usually the first Dow component to report earnings every quarter.
Despite the better revenue number, Alcoa's stock performance Wednesday was lackluster. It traded higher for part of the day then ended down 2 cents at $9.08.
Other companies fared better after reporting earnings. Helen of Troy, which sells personal care products under brands including Dr. Scholl's and Vidal Sassoon, rose 2.7 percent, up 90 cents to $34.43 after reporting a 15 percent increase in quarterly net income.
Boeing was the biggest gainer of the 30 stocks in the Dow. It jumped 3.5 percent, up $2.63 to $76.76, following two days of sharp declines triggered by new problems for its 787 Dreamliner. Boeing said it has "extreme confidence" in the plane even as federal investigators try to determine the cause of a fire Monday aboard an empty Japan Airlines plane in Boston and a fuel leak at another JAL 787 on Tuesday.
The yield on the 10-year Treasury note edged down to 1.86 percent from 1.87 percent.
Among other stocks making big moves:
— Wireless network operator Clearwire jumped 7.2 percent, or 21 cents, to $3.13, after Dish network made an unsolicited offer to buy the company, which has already agreed to sell itself to Sprint. Dish rose 88 cents to $36.85, and Sprint fell 9 cents to $5.88.
— Online education company Apollo Group plunged 7.8 percent after reporting a sharp decline in fall-term student sign-ups at the University of Phoenix. The stock fell $1.63 to $19.32.
— Seagate Technology, a maker of hard-disk drives, jumped 6.6 percent, up $2.09 to $33.48, after predicting revenue for its fiscal second quarter that topped Wall Street expectations late Tuesday.
— Bank of America fell 4.6 percent, down 55 cents to $11.43, after Credit Suisse analysts lowered their outlook on the bank to "neutral" for "outperform," saying the current stock price overestimates the improvement in cost reduction that the bank can achieve this year.

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Wall Street rises after Alcoa reports earnings

NEW YORK (Reuters) - Stocks rose on Wednesday, rebounding from two days of losses, as investors turned their focus to the first prominent results of the earnings season.
Stocks had retreated at the start of the week from the S&P 500's highest point in five years, hit last Friday, on worries about possible earnings weakness.
Shares of Alcoa Inc were down 0.5 percent to $9.08 after early gains, following the company's earnings release after the bell on Tuesday. The largest U.S. aluminum producer said it expects global demand for aluminum to grow in 2013.
Herbalife Ltd stock rose 4.2 percent to $39.95 in its most active day of trading in the company's history after hedge fund manager Dan Loeb took a large stake in the nutritional supplements seller. Prominent short-seller Bill Ackman had previously accused the company of being a "pyramid scheme," which Herbalife has denied.
Traders have been cautious as the current quarter shaped up like the previous one, with companies recently lowering expectations, said James Dailey, portfolio manager of Team Asset Strategy Fund in Harrisburg, Pennsylvania. Lower expectations leave room for companies to surprise investors even if their results are not particularly strong.
"The big question and focus is on revenue, and Alcoa had better-than-expected revenue," which calmed the market a little, Dailey said.
Overall, corporate profits were expected to beat the previous quarter's meager 0.1 percent rise. Both earnings and revenues in the fourth quarter are expected to have grown by 1.9 percent, according to Thomson Reuters data.
The Dow Jones industrial average <.dji> gained 61.66 points, or 0.46 percent, to 13,390.51. The Standard & Poor's 500 Index <.spx> rose 3.87 points, or 0.27 percent, to 1,461.02. The Nasdaq Composite Index <.ixic> gained 14.00 points, or 0.45 percent, to 3,105.81.
Facebook Inc shares rose above $30 for the first time since July 2012, trading up 5.3 percent at $30.59. Facebook, which has been tight-lipped about its plans after its botched IPO in May, invited the media to its headquarters next week.
Clearwire Corp shares jumped 7.2 percent to $3.13 after Dish Network bid $2.28 billion for the company, beating out a previous Sprint offer and setting the stage for a takeover battle for the wireless service provider that owns crucial mobile spectrum.
Apollo Group Inc slid after heavier early losses, a day after it reported lower student sign-ups for the third straight quarter and cut its operating profit outlook for 2013. Apollo's shares were last off 7.8 percent at $19.32.
Volume was below the 2012 average of 6.42 billion shares traded per day, as 6.10 billion were traded on the New York Stock Exchange, NYSE MKT and Nasdaq.
Advancing stocks outnumbered declining ones on the NYSE by 2,014 to 963, while on the Nasdaq advancers beat decliners 1,603 to 859.

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As public fumes, AIG says will not sue U.S. over bailout

(Reuters) - Facing anger from Congress and the American people, AIG Inc said on Wednesday it would not sue the U.S. government over terms of the company's multi-billion dollar bailout.
Insurer American International Group had been weighing whether to join a lawsuit filed by its former Chief Executive Hank Greenberg and his company Starr International, which owned 12 percent of AIG before its $182 billion rescue that started in 2008.
Greenberg claims the rescue was unfair to shareholders and that the Federal Reserve Bank of New York charged an excessive interest rate on its initial loan. He is seeking billions of dollars in damages.
AIG said its board had carried out its legal and fiduciary duty to consider joining Greenberg's lawsuit before making its decision. Greenberg has a case pending in the Court of Federal Claims in Washington, D.C., and is also appealing the dismissal of a lawsuit in the federal court in New York.
AIG's Chief Executive Bob Benmosche said in an interview with CNBC that ultimately the public had to trust the company.
"It is not acceptable socially for AIG to have taken this money and to think we can go back and sue the government," Benmosche said.
AIG said it would not pursue Starr's claims nor would it allow Starr to pursue them on AIG's behalf, setting the stage for a fresh legal fight between Greenberg and the company.
The idea that AIG might sue the government struck a raw nerve with the public, which took to the Internet to vent its anger at what it viewed as the company's audacity. The volume of AIG mentions on Twitter rose more than 50-fold on Tuesday, according to Topsy Analytics.
Starr's attorney, David Boies, said in a statement that AIG's effort to block Starr from pursuing claims was contrary to shareholders' interests.
"Whether or not the AIG Board will be successful in blocking Starr's efforts to recover damages for their shareholders will ultimately be decided the Court," Boies said.
EMOTIONS RUN HIGH
Former Obama administration adviser Austan Goolsbee said "GO SCREW YOURSELVES" in a multi-tweet tirade. Comedian Andy Borowitz drafted a mock letter from the company to taxpayers, asking for more bailout money to pay for the cost of the lawsuit. Dozens of obscene comments made descriptive references to the anatomy of Chief Executive Robert Benmosche.
And those were the gentler barbs. The New York Daily News ran an editorial cartoon in which a lifeguard saves a drowning man with "AIG" on his belly. When the lifeguard asks the man how he feels, the victim says, "Like suing you."
The vitriol was just like it had been in late 2008 and early 2009 when, with the United States deep in recession, AIG employees hid ID badges and their families were threatened amid an uproar over bonuses.
A group of congressmen led by Vermont Democrat Peter Welch sent AIG's chairman a letter late on Tuesday, advising, "Don't do it. Don't even think about it." Other members of Congress threatened hearings.
AIG took to Twitter to defend itself, saying it was legally obligated to at least consider action, but its defense mostly fell on deaf ears.
The U.S. government rescued the company from the brink of bankruptcy in September 2008 with a bailout that ultimately topped $182 billion. After a recapitalization deal closed in early 2011, the U.S. Treasury owned 92 percent of AIG.
The Treasury sold the last of that stake in mid-December 2012. The government has said it earned a return of $22.7 billion on the rescue.
AIG shares rose 0.3 percent to close at $35.76. The stock lost half its value in 2011 but then rose more than 50 percent in 2012, as it showed consistent profitability.

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U.S. launches review of Shell Arctic drilling program

WASHINGTON (Reuters) - The Interior Department will review Royal Dutch Shell's 2012 Arctic oil drilling program to assess the challenges the oil company faced and to help guide future permitting in the region.
The announcement on Tuesday follows the grounding of one of Shell's rigs off the coast of Alaska last week, the latest mishap the company has encountered as it undertakes an ambitious Arctic exploration effort.
"Exploration allows us to better comprehend the true scope of our resources in the Arctic ... but we also recognize that the unique challenges posed by the Arctic environment demand an even higher level of scrutiny," Interior Secretary Ken Salazar said in a statement.
Any changes in permitting requirements or delays due to the review could threaten Shell's drilling plans for 2013. The company faces a limited window during the summer when weather conditions and regulators will allow drilling.
Interior said it hopes to complete its "high-level" assessment within 60 days.
Also on Tuesday, the U.S. Coast Guard in Alaska ordered a special investigation into the causes of last week's grounding of Shell's Kulluk drill ship, a probe that the Coast Guard said was expected to take several months.
Known as a formal marine casualty investigation, it is convened when a shipping accident has considerable regional significance or may indicate vessel class problems, or if such an investigation is the best way to assess technical issues that may have contributed to the problem, the Coast Guard said.
Shell has spent $4.5 billion since 2005 to develop the Arctic's vast oil reserves, but the company has faced intense opposition from environmentalists and native groups, as well as regulatory and technical hurdles.
The oil company made some strides last year, actually beginning preparatory drilling in the Chukchi and Beaufort seas. But the work was far short of completing up to three wells in the Chukchi and up to two in the Beaufort, as Shell planned.
Instead, its 2012 drilling season was beset by delays due to lingering ice in the water and problems with getting a mandatory oil spill containment vessel certified by the Coast Guard.
Shell welcomed the department's review, conceding that it had experienced some challenges.
"We have already been in dialogue with the DOI on lessons learned from this season, and a high level review will help strengthen our Alaska exploration program going forward," Shell spokeswoman Kelly op de Weegh said in a statement.
Interior said it would examine the issues with Shell's containment vessel, as well as issues with Shell's two Arctic drilling rigs, the Kulluk and Noble Corp's Discoverer, which Shell has under contract there.
It was the Kulluk that broke away from tow boats and ran aground on New Year's Eve in what were described as near hurricane conditions before being towed to safety on Monday.
U.S. Senator Mark Begich, an Alaska Democrat and strong supporter of offshore Arctic drilling, called on Tuesday for a hearing to examine the Kulluk situation.
"While this incident notably involves marine transportation and not oil exploration or drilling, we must quickly answer the many questions surrounding the Kulluk grounding and improve any regulatory or operational standards as needed to ensure this type of maritime accident does not occur again," Begich said in a letter to Coast Guard Commandant Admiral Robert Papp and to Shell.
Environmentalists see the Kulluk accident as new evidence that oil companies are not ready for Arctic drilling, calling on the government to put permitting there on hold.
One group calling for a pause in permitting, conservation group Oceana, said Interior's review was a step in the right direction, but it must be "more than a paper exercise."
"The Department of the Interior, after all, is complicit in Shell's failures because it granted the approvals that allowed Shell to operate," said Michael LeVine, Pacific senior counsel at the ocean conservation group.
As for the Kulluk itself, the unified command for the accident response said it remained anchored in its bay of refuge and still showed no signs of leaks or spills. Later on Tuesday, remote operated vehicles are expected to examine the hull and divers will be called in if necessary, the statement said.

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Defense rests in trial of boy who killed neo-Nazi father

RIVERSIDE, California (Reuters) - Attorneys representing a 12-year-old California boy charged with murdering his neo-Nazi father rested their case Tuesday without calling him to testify in a case that drew attention due to the rarity of a parent being slain by a child so young.
Lawyers for Joseph Hall concede that the boy, then just 10 years old, shot his father in May 2011 at point blank range, but argue that he should not be held criminally responsible. The gun belonged to his father, Jeffrey Hall, 32.
The boy's lawyers had suggested on Monday that he might testify in his own defense before the closely watched juvenile trial in Riverside County Superior Court concludes.
But defense attorney Matthew Hardy, in resting his case, said Hall would not be taking the witness stand, clearing the way for closing arguments to begin on Wednesday. Hardy did not elaborate on the decision.
Superior Court Judge Jean Leonard said she would likely render her verdict in the case, which is being conducted without a jury, on Monday morning.
"At this point, I'm really not sure what I'm going to do. I haven't made any decisions," Leonard told the attorneys.
The case has made headlines because of the father's neo-Nazi associations and the rarity of a parent being killed by a child so young.
Kathleen Heide, a criminologist who specializes in juvenile offenders, has said that 8,000 murder victims over the past 32 years were slain by their offspring, but only 16 of those were committed by defendants aged 10 or younger.
Hardy formally withdrew a plea of not guilty by reason of insanity on Monday and said that he would ask during closing arguments that the charges against Hall be dismissed on the grounds that prosecutors had not proven the boy was culpable.
Since Hall is a minor, the purpose of the trial is not to determine guilt or innocence but whether certain allegations about his motives are true. If he is found responsible for the crime, he could be sent to a juvenile facility until he is 23.
The outcome hinges on the boy's understanding of right and wrong at the time. Defense lawyers have said the boy was conditioned by his father's violent, racist behavior and that he killed him to put an end to the physical abuse inflicted on him.
Prosecutors say Hall, who lived with four siblings, killed his father because he thought he was planning to divorce his stepmother, Krista McCary. Prosecutors said the boy was close to McCary and considered her his true mother.

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U.S. does not rule out removing all troops from Afghanistan

WASHINGTON (Reuters) - The Obama administration does not rule out a complete withdrawal of U.S. troops from Afghanistan after 2014, the White House said on Tuesday, just days before President Barack Obama is due to meet Afghan President Hamid Karzai.
The comments by U.S. Deputy National Security Adviser Ben Rhodes were the clearest signal yet that, despite initial recommendations by the top military commander in Afghanistan to keep as many as 15,000 troops in the country, Obama could opt to remove everyone, as happened in Iraq in 2011.
Asked about consideration of a so-called zero-option once the NATO combat mission ends at the end of 2014, Rhodes said: "That would be an option that we would consider."
Rhodes made clear that a decision on post-2014 troop levels is not expected for months and will be made based on two U.S. security objectives in Afghanistan - denying a safe haven to al Qaeda and ensuring Afghan forces are trained and equipped so that they, and not foreign forces, can secure the nation.
"There are, of course, many different ways of accomplishing those objectives, some of which might involve U.S. troops, some of which might not," Rhodes said, briefing reporters to preview Karzai's visit.
In Iraq, Obama decided to pull out all U.S. forces after failing in negotiations with the Iraqi government to secure immunity for any U.S. troops who would remain behind.
The Obama administration is also insisting on immunity for any U.S. troops that remain in Afghanistan, and that unsettled question will figure in this week's talks between Obama and Karzai and their aides.
"As we know from our Iraq experience, if there are no authorities granted by the sovereign state, then there's no room for a follow-on U.S. military mission," said Douglas Lute, special assistant to Obama for Afghanistan and Pakistan.
Jeffrey Dressler, an Afghanistan expert at the Washington-based Institute for the Study of War who favors keeping a larger presence in Afghanistan, questioned whether the White House comments might be part of a U.S. bargaining strategy with Kabul.
"I can't tell that they're doing that as a negotiating position ... or if it is a no-kidding option," Dressler said. "If you ask me, I don't see how zero troops is in the national security interest of the United States."
SHOULDN'T JUST "LEAVE THEM"
U.S. officials have said privately that the White House had asked for options to be developed for keeping between 3,000 and 9,000 troops in the country, a lower range than was put forward initially by General John Allen, the top U.S. and NATO commander in Afghanistan.
Allen suggested keeping between 6,000 and 15,000 troops in Afghanistan.
Retired General Stanley McChrystal, a former U.S. commander of the Afghan mission who resigned in 2010, said in an interview with Reuters on Monday there was a value to having an overt U.S. military presence in Afghanistan after 2014 - even if it wasn't large.
"The art, I would say, would be having the smallest number so that you give the impression that you are always there to help, but you're never there either as an unwelcome presence or an occupier - or any of the negatives that people might draw," he said, without commenting on any specific numbers.
The United States now has about 66,000 troops in Afghanistan and Rhodes confirmed there would be steady reductions in troop levels through 2014.
Also on the agenda for the Obama-Karzai talks are tentative reconciliation efforts involving Taliban insurgents. Those efforts have shown flickers of life after nearly 10 months of limbo.
Still, hopes for Afghan peace talks have been raised before, only to be dashed. Last March, the Taliban suspended months of quiet discussions with Washington aimed at getting the insurgents and the Karzai government to the peace table.
Washington has also had a strained relationship with Karzai, who in October accused the United States of playing a double game in his country by fighting the war in Afghan villages instead of going after those in Pakistan who support insurgents.
Karzai will give a joint press conference with Obama on Friday and will visit the Pentagon on Thursday, meeting with Defense Secretary Leon Panetta and the U.S. top military officer, General Martin Dempsey.
Still, it is unclear what, if any, concrete agreements might emerge from Karzai's visit to Washington.
Michael O'Hanlon, a defense analyst at Brookings, cautioned against expecting too much from the visit, which he said is best seen as an opportunity for Washington and Kabul to "shore up this partnership that has had such a troubled status and a weak foundation."
"There are a lot of scars in this relationship. There are a lot of hurt feelings," O'Hanlon said. "It's sort of like a bad marriage and it's very easy for just the wrong word to immediately set people off in an emotional way."

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US banks try to clean up remaining mortgage mess

WASHINGTON (AP) — U.S. banks have taken another step to clear away the wreckage of the 2008 financial crisis by agreeing to pay $8.5 billion to settle charges that they wrongfully foreclosed on millions of homeowners.
The deal announced Monday could compensate hundreds of thousands of Americans whose homes were seized because of abuses such as "robo-signing," when banks automatically signed off on foreclosures without properly reviewing documents. The agreement will also help eliminate huge potential liabilities for the banks.
But consumer advocates complained that regulators settled for too low a price by letting banks avoid full responsibility for foreclosures that victimized families and fueled an exodus from neighborhoods across the country.
The settlement ends an independent review of loan files required under a 2011 action by regulators. Bruce Marks, CEO of the advocacy group Neighborhood Assistance Corp. of America, noted that ending the review will cut short investigations into the banks' practices.
"The question of who's to blame — the homeowners or the lenders — if you stop this investigation now, that will always be an open-ended question," Marks said.
The banks, which include JPMorgan Chase, Bank of America and Wells Fargo, will pay about $3.3 billion to homeowners to end the review of foreclosures.
The rest of the money — $5.2 billion — will be used to reduce mortgage bills and forgive outstanding principal on home sales that generated less than borrowers owed on their mortgages.
A total of 3.8 million people are eligible for payments under the deal announced by the Office of Comptroller of the Currency and the Federal Reserve. Those payments could range from a few hundred dollars to up to $125,000.
Homeowners who were wrongly denied a loan modification will be entitled to relatively small payments. By contrast, people whose homes were unfairly seized and sold would be eligible for the biggest payments.
Banks and consumer advocates had complained that the loan-by-loan reviews required under the 2011 order were time-consuming and costly and didn't reach many homeowners. Banks were paying large sums to consultants to review the files. Some questioned the independence of those consultants, who often ruled against homeowners.
The deal "represents a significant change in direction" that ensures "consumers are the ones who will benefit, and that they will benefit more quickly and in a more direct manner," Thomas Curry, the comptroller of the currency, said in a statement.
But Charles Wanless, a homeowner in the Florida Panhandle, is among those who question that promise. Wanless, who is fighting foreclosure proceedings with Bank of America, says he doubts the money will benefit many who lost homes.
"Let's say they already foreclosed on me and I lost my home," said Wanless, who runs a pool cleaning business in Crestview, Fla. "What's $1,000 going to do to help me? If they took my house away wrongfully, is that going to get me my house back? I might be able to find one if I'm one of the lucky ones who gets $125,000."
Diane Thompson, a lawyer with the National Consumer Law Center, complained that the deal won't actually compensate homeowners for the actual harm they suffered.
The deal "caps (banks') liability at a total number that's less than they thought they were going to pay going in," she said.
Thompson supports the decision to make direct payments to victimized homeowners. But she said the deal will work only if it includes strong oversight and transparency provisions.
The companies involved in the settlement announced Monday also include Citigroup, MetLife Bank, PNC Financial Services, Sovereign, SunTrust, U.S. Bank and Aurora. The 2011 action also included GMAC Mortgage, HSBC Finance Corp. and EMC Mortgage Corp.
Regulators announced the deal on the same day that Bank of America agreed to pay $11.6 billion to government-backed mortgage financier Fannie Mae to settle claims related to mortgages that soured during the housing crash.
The agreements come as U.S. banks are showing renewed signs of financial health, extending their recovery from the 2008 crisis that nearly toppled many of them. They are lending more and earning greater profits than at any time since the Great Recession began in December 2007.
Monday's foreclosure settlement doesn't close the book on the housing crisis, which caused more than 4 million foreclosures. It covers only consumers who were in foreclosure in 2009 and 2010. Some banks didn't agree to the settlement. And resolving millions of claims involving multiple banks and mortgage companies is complicated and time-consuming.
"It's going to take a few more years to get it sorted out," said Bert Ely, an independent banking consultant.
Michael Allen of Petersburg, Va., hopes to benefit from the settlement. He lost his home last month after 2½ years of trying to modify his mortgage. He had fallen behind on his payments after the plant he was working closed.
"I was working with the banks to re-modify (my loan), and I'd get to the final stages and I'd have to start over again. They didn't give me any reason. I'd call them, they'd transfer me from one person to the next. ... They just kept giving me the runaround."
Citigroup said in a statement that it was "pleased to have the matter resolved" and thinks the agreement "will provide benefits for homeowners." Citi expects to record a charge of $305 million in the fourth quarter of 2012 to cover its cash payment under the settlement. The bank expects that existing reserves will cover its $500 million share of the non-cash foreclosure aid.
Bank of America CEO Brian Moynihan said the agreements were "a significant step" in resolving the bank's remaining legacy mortgage issues while streamlining the company and reducing future expenses.
Amy Bonitatibus, spokeswoman for JPMorgan Chase, said the bank had "worked very hard" on the foreclosure review and was "pleased to have it now behind us."
U.S. Bancorp, which owns U.S. Bank, said its part of the settlement includes an $80 million payment to homeowners. That payment will reduce its fourth-quarter earnings by 3 cents per share. It has also committed $128 million in mortgage aid.
Leaders of a House oversight panel have asked regulators for a briefing on the proposed settlement. Regulators had refused to brief Congress before announcing the deal publicly.
Rep. Elijah Cummings of Maryland, the top Democrat on the House Committee on Oversight and Government Reform, said the settlement "may allow banks to skirt what they owe and sweep past abuses under the rug without determining the full harm borrowers have suffered."
He complained that regulators failed to answer key questions about how the settlement was reached, who will get the money and what will happen to others who were harmed by these banks but were not included in the settlement.
The settlement is separate from a $25 billion settlement among 49 state attorneys general, federal regulators and five banks: Ally, formerly known as GMAC; Bank of America; Citigroup; JPMorgan Chase and Wells Fargo.

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