February 9, 2012- Final issues are being hammered out in a settlement between state attorney generals and major banks over the faulty foreclosures that have taken place. The settlement of over $25 billion is pending the signing of holdouts New York and California to complete the deal.
It is expected that on Thursday the nationwide plan will be announced to help close to two million homeowners who have been hurt by improper foreclosure practices. The agreement has been negotiated amongst the nation’s largest banks and the states’ attorney generals.
This proposed deal would be the nation’s largest since the settlement of $206 billion in 1998 with the tobacco industry. Much of the settlement will go to those who are currently having problems paying mortgages or who have lost homes due to foreclosure.
Nearly one million homeowners may receive aid through the deal said a statement from the Department of Housing and Urban Development. Close to $17 billion will be given as direct relief to borrowers, with a large amount of that used to reduce principal on the mortgages. Three billion dollars will help borrowers to get refinancing for lower-cost mortgages.
Five billion dollars would serve as a reserve account for federal and state programs and to help homeowners who were harmed by bad bank practices. Negotiators said close to 750,000 people could have checks sent to them for between $1,500 and $2,000.