Banks, States Reach 26 Billion Dollar Foreclosure Settlement
Under the terms of the settlement, $5 billion will go toward a reserve account for state and federal programs and to individual homeowners harmed by bank practices. Negotiators have said that about 750,000 people could receive checks for about $1,500 to $2,000.
About $3 billion will go toward helping borrowers who are current on their mortgages but have no equity in their homes to refinance into new, lower-cost loans. The program will be similar to an existing Obama administration program that seeks to help underwater homeowners.
The massive effort, more than a year in the making, is the most recent government attempt to boost the limping housing market and help people whose homes lost significant value in the housing crash.