Citigroup (C) agreed to change its home equity lending practices and allow borrowers whose credit lines were suspended or cut to challenge its actions or recover some fees, Reuters reports.

The changes are part of a settlement of nationwide litigation on behalf of thousands of borrowers who took out home equity lines of credit, or HELOCs, from the New York-based bank.

According to papers filed on Friday with the U.S. District Court in San Francisco, Citigroup will give borrowers whose HELOCs were suspended or cut, because of an alleged significant drop in the homes' values, a chance to reinstate their accounts.

The settlement, Reuters says, requires court approval and covers borrowers from January 1, 2008 to January 31, 2012 whose HELOC accounts were suspended or reduced. A hearing on preliminary approval is scheduled for September 21.

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jhilley@housingwire.com