Jan. 26, 2012
$25 BILLION MORTGAGE PACT GOES TO
STATES - THE NATION'S 5 LARGEST
MORTGAGE LENDERS HAVE AGREED TO
OVERHAUL THEIR INDUSTRY
However, those who lost their homes due to foreclosure are unlikely to get their homes back or benefit
financially from the settlement. About 750,000 Americans may receive checks for about $1,800 under this settlement.
More than 262,000 Nevada homeowners could be eligible for a settlement.
As part of the deal about one million homeowners could get the principal
amount of their mortgages written down by an average of $20,000.
Under the deal - $17 billion will go to reducing the principal. $5 billion will be placed in a reserve account to cover the $1,800 check payouts. $3 billion to help homeowners refinance.
Five major banks, BOA, Chase, Wells Fargo, Citibank and Ally Financial could adopt the
agreement within weeks. The settlement would be the biggest of a single industry since the 1998 multi-state
Some say the deal doesn't go far enough. Some states say that banks should not be
protected from future liability. The deal will not fully release banks from future
criminal lawsuits from individual states.
In December, Massachusetts sued the 5 major banks over deceptive foreclosure practices. V.P. Biden is opposed to the proposed settlement as drafted.