Foreclosure Settlement between Banks and Government “Very Close”



As many as one million underwater borrowers deemed to be “at risk” of losing their homes could be set for a reprieve through a reduction on their mortgage principle, following reports that the government and America’s biggest banks have nearly reached a deal on mortgage aid.

foreclosure settlement

Mortgage aid for up to one million homeowners is on its way © frenta - Fotolia.com

Reuters reported that officials from federal and state governments are nearing the end of settlement talks with bank chiefs, following months of negotiations that stemmed from bank’s alleged foreclosure abuses back in 2010, which caused numerous homeowners to lose possession of their homes.

According to Shaun Donovan, the secretary of the US Housing and Urban Development department, the government is very close to reaching a settlement that could help more than one million families in the US to remain in their homes through the proposed mortgage assistance.

The proposed settlement on the table would see major lenders such as the Bank of America, JP Morgan Chase, Citigroup, Wells Fargo and Ally Financial pay around $20 to $25 billion compensation for their alleged foreclosure abuses.

During questioning at a Winter Meeting of the U.S. Conference of Mayors in Washington, Donovan stated that banks would also agree to reduce the mortgage principle of as many as one million borrowers, to the tune of $20,000 each. Further, Donovan said that families whose homes had been wrongly foreclosed upon may also be entitled to compensation as part of the settlement, Reuters reported.

About Mike Wheatley

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at mike@realtybiznews.com.

Comments

  1. Fran Curtis says:

    What are they thinking, twenty thousand is a drop in the bucket. Our home is two hundred thousand up side down. The homes in our area have dropped four hundred thousand. They should drop the principle one hundred and twenty thousand here in Antioch Ca. Our home is worth less that what we purchased it in 1999. We got it a 228K they are selling now for 175K we owe 410k now. Three years ago it was at 650k. Just about every home on our street has been forclosed on, we are one of the last ones

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  1. […] Justice Department and other federal agencies. Finally, after more than a year of investigations, a settlement appears to be close. Now, Obama wants the investigation to expand into issues of lending and […]

  2. […] Justice Department and other federal agencies. Finally, after more than a year of investigations, a settlement appears to be close. Now, Obama wants the investigation to expand into issues of lending and […]