February 9th, 2012
10:22 AM ET

Deal could bring billions in mortgage relief

In the largest deal to date aimed at addressing the housing meltdown, federal and state officials on Thursday announced a $26 billion foreclosure settlement with five of the largest home lenders.

The settlement settles potential state charges about allegations of improper foreclosures based on "robosigning," seizures made without proper paperwork.

Most of the relief will go to those who owe far more than their homes are worth, known as being underwater on the loans. That relief will come over the course of the next three years, with the banks having incentives to provide most of the relief in the next 12 months.

At least $17 billion of the settlement will go to reducing the principal owed by homeowners who are both underwater and behind on their mortgages. Depending on which loans have the amount owed cut, the amount of principal relief could reach as much as $34 billion.

FULL STORY
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Filed under: Economy • Housing
soundoff (29 Responses)
  1. James

    How does one apply to get some of this settlement aide? I have a few clients that are in danger of losing their homes within the next 60-90 days. I need to know who, what, and where I can steer them to, so that they can get immediate help. Thanks

    February 9, 2012 at 11:10 am | Report abuse |
  2. Greek American

    @James
    Maybe you could try to somehow research who the 5 largest lenders are and then go from there?

    February 9, 2012 at 11:46 am | Report abuse |
  3. banasy©

    The five are

    Bank of America
    JP Morgan Chase
    Citigroup
    Wells Fargo
    Ally Financial.

    It's in the full story. :)

    February 9, 2012 at 1:14 pm | Report abuse |
    • TORI ¬©

      Hi @banasy, the 5 banksters mentioned seem to be in charge of running our country into the ground. These folks underwater in their home mortgages are suffering while the banks get off without punishment. I moved my money out of Chase and went with a CU when all of the machinations of these commercial banks became transparent.

      February 9, 2012 at 5:15 pm | Report abuse |
    • BOMBO ¬©

      But you have to admit, the Ally commercials are great.

      Would you like a pony?

      February 9, 2012 at 5:26 pm | Report abuse |
    • TORI ¬©

      @bombo, call me weird, but I never watch television.

      February 9, 2012 at 5:53 pm | Report abuse |
    • banasy¬©

      I have been in a CU for the past twenty years, and I have never had a complaint against themNot once.

      @BOMBO:
      Sure, they're commercials are great, but apparently their lending practices could use a little help...

      February 9, 2012 at 7:14 pm | Report abuse |
  4. bobcat (in a hat) ©

    @banasy©
    You just make things to easy girl. LMAO

    February 9, 2012 at 1:22 pm | Report abuse |
    • banasy¬©

      Just trying to be helpful, bc (IN a hat)

      February 9, 2012 at 2:11 pm | Report abuse |
  5. Ross

    You mean we're not sending $26 billion over seas for foreign aid? But is this possible? Our own tax money for domestic use. Oh wow. That is news.

    February 9, 2012 at 1:35 pm | Report abuse |
    • bobcat (in a hat) ¬©

      We're not showing much of a case of sarcasm here, are we ? LOL

      February 9, 2012 at 1:39 pm | Report abuse |
  6. gung hoe

    Geez think I will apply.The vault doors are open,shoot why not let the gov pay for my home.Then what we was going to pay on the house.Take a cruise.

    February 9, 2012 at 1:50 pm | Report abuse |
    • banasy¬©

      Oh, your house in in forclosure, gung?
      I'm sorry.

      February 9, 2012 at 2:10 pm | Report abuse |
  7. seebofubar

    THIS WORTHLESS PIECE OF CRAP NEEDS TO GO!!

    February 9, 2012 at 2:38 pm | Report abuse |
    • banasy¬©

      Who?

      February 9, 2012 at 2:40 pm | Report abuse |
    • seebofubar

      Our self-serving sad excuse for a president!

      February 9, 2012 at 3:25 pm | Report abuse |
    • banasy¬©

      Ah.

      February 9, 2012 at 4:02 pm | Report abuse |
    • seebofubar's doctor

      Please don't disturb seebofubar when he's on the toilet. Thank you.

      February 9, 2012 at 6:19 pm | Report abuse |
  8. Marl

    The CNN headline SHOULD read "mortgage deal fails to help the 74 million responsible homeowners".

    February 9, 2012 at 5:05 pm | Report abuse |
    • banasy¬©

      Amen!

      February 9, 2012 at 10:06 pm | Report abuse |
  9. CP

    Principal not principle CNN. Com'on man.

    February 9, 2012 at 6:06 pm | Report abuse |
  10. chrissy

    @ gung hoe, people are NOT recieving actual cash, its being takin off their mortgage debt because of the infated value of homes is incorrect.

    February 9, 2012 at 6:57 pm | Report abuse |
  11. citizen

    This settlement only helps 1 million homeowners who's loans are owned by the banks.
    The rest of the loans are held by Fannie and Freddie with the 5 zombie banks acting as servicers.
    The two taxpayer owned entities (TOES) are still in hock to the American people for a couple of hundred billion dollars.
    This is a sideshow over robo-signing.
    The corrupt banks, and even more corrupt ratings agencies still haven't been taken to task for the very real fraud that was perpetrated by smooth criminals.
    Have fun digesting digesting 2.5 trillion worth of junk assets FED reserve.

    February 9, 2012 at 7:25 pm | Report abuse |
  12. hamsta

    What they didnt tell you is that people who lost their home already due to improper procedures will only recieve $2000 regardless how much money they lost in a defaulted mortgage.

    February 9, 2012 at 10:15 pm | Report abuse |
    • banasy¬©

      Yes, they did.
      I just read it in the article.
      'Full Story'.

      February 10, 2012 at 8:40 am | Report abuse |
  13. hamsta

    kind of like that 300 dollars every citizen collected as stimulus.the bill for that was 1.6 trillion.i dont think any person needed that 300 dollars that bad.

    February 9, 2012 at 10:19 pm | Report abuse |
    • banasy¬©

      I know that you gave back the money GWB sent out from the budget surplus when he first took office because you're altruistic, right?

      February 10, 2012 at 8:42 am | Report abuse |
  14. Tony Scott

    Have a conventional Home loan. Put 20% down, almost 7 years ago. Just want to refi to 15 years from a 30 year. Charter one/CCO Mortgage said no. I`m underwater. Want`s me to pay thousand`s to even up loan and another 20% to have equity in the house. I never missed a payment. Anybody hear about a new bill proposed about bank`s waiving the appraisal so folk`s like me can get a good Interest rate??? Maybe refi down the line. Signed, $40,000 in the hole

    March 20, 2012 at 10:41 am | Report abuse |