NPR : News

Filed Under:

Settlement Reached With Banks On Relief For Some Homeowners

Casey Serin: http://www.flickr.com/photos/sercasey/248457195/

"After negotiating through the night," NPR's Yuki Noguchi reports, states attorneys general, federal officials and five major banks have agreed on a plan that will provide about $26 billion in mortgage relief and aid to homeowners who got crushed when the housing bubble burst.

The Justice Department, NPR's Carrie Johnson tells us, just announced that "Attorney General Eric Holder, Department of Housing and Urban Development (HUD) Secretary Shaun Donovan, Iowa Attorney General Tom Miller and other federal and state officials" will unveil details of the much-anticipated plan at 10 a.m ET.

According to Yuki, California was the last state to sign on to the deal. Now, she tells our Newscast Desk, "in exchange for a kind of immunity from many types of mortgage-related lawsuits, the banks will have to pay about $5 billion in cash" and write down, refinance or reduce the principal on more than $20 billion worth of home loans. "Some estimates say as many as 1 million homeowners who owe more than their home is worth, could be eligible for some sort of payment reduction."

As Yuki has also previously explained, the bulk of the money:

"Would go toward writing down principal payments for homeowners who were not foreclosed upon, but who are struggling now. ... The way it would work is that the banks would have targets they have to meet, in terms of what kinds of loans they would have to modify. But the banks would still have a lot of discretion in who gets what.

"And there's another $5 billion in cash, part of which would go to the states to help fund homeowner assistance programs. Some of the rest would go to homeowners who may have been wrongfully foreclosed upon. For them, it's up to $2,000 each, which is not much if you lost your home."

The five banks are Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.

Yuki reports that the settlement "would cover them against any suits regarding that robo-signing issue, where mortgage companies signed false affidavits in order to speed up the foreclosure process, which was what started this whole process in the first place."

Update at 12:45 p.m. ET. Obama Sees End Of "Era Of Recklessness":

"We have reached a landmark settlement with the nation's largest banks" which will "begin to turn the page on an era of recklessness," the president just said at the White House.

Update at 11:05 a.m. ET. More Details:

-- The Department of Justice's statement on the settlement.

-- The National Mortgage Settlement website.

Update at 10:45 a.m. ET. Holder Hails "Landmark" Agreement:

After calling it a "landmark agreement," Attorney Gen. Eric Holder said at the news conference a short time ago that it "reflects our commitment at both the federal and state levels to ensure justice and to recover losses for victims of reckless and abusive mortgage practices."

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

NPR

He Died At 32, But A Young Artist Lives On In LA's Underground Museum

When Noah Davis founded the museum, he wanted to bring world-class art to a neighborhood he likened to a food desert, meaning no grocery stores or museums. Davis died a year ago Monday.
NPR

The Strange, Twisted Story Behind Seattle's Blackberries

Those tangled brambles are everywhere in the city, the legacy of an eccentric named Luther Burbank whose breeding experiments with crops can still be found on many American dinner plates.
WAMU 88.5

State Taxes, School Budgets And The Quality Of Public Education

Budget cutbacks have made it impossible for many states to finance their public schools. But some have bucked the trend by increasing taxes and earmarking those funds for education. Taxes, spending and the quality of public education.

NPR

Listen: 'Web Site Story,' NPR's Musical About The Internet — From 1999

Found in our archives: an Internet-themed remake of West Side Story from the dot-com bubble era. It begins with Bill Gates and features the sound of a modem but isn't as obsolete as you might expect.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.