A previously announced $25 billion settlement between five major banks accused of abusive mortgage practices and government officials will be filed in federal court on Monday, people familiar with the matter said late Friday.

The pact unveiled February 9 is expected to result in payments and other mortgage relief for about one million borrowers, but must first be approved by a judge.

Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co, Citigroup Inc and Ally Financial Inc agreed to the settlement after 16 months of negotiations with state attorneys general and federal agencies, including the U.S. Justice Department and the U.S. Department of Housing and Urban Development.

But the fine print took another month to finalize.

Negotiators had hoped to file a settlement on Friday, but the deal was held up at the last minute over a disagreement between Nevada and Bank of America, people familiar with the matter said.

The state and the bank had negotiated a separate side deal to resolve an older lawsuit filed by the state.

The nature of the Friday disagreement was not immediately clear. Representatives of Nevada and Bank of America could not immediately be reached for comment after business hours.

The larger deal, to be spread out over three years, requires the banks to cut mortgage debt amounts and provides $2,000 payments to certain borrowers who lost their homes to foreclosure.

It releases the banks from civil government claims over faulty foreclosures and the mishandling of requests for loan modifications. Forty-nine states signed the pact.

The probe that led to the settlement discussions started after evidence emerged late in 2010 that banks robo-signed thousands of foreclosure documents without properly reviewing paperwork.

(Reporting By Aruna Viswanatha; editing by Carol Bishopric)

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