This week, JPMorgan Chase agreed to a $13 billion settlement with the Justice Department over the sale of faulty mortgage securities that led to the financial crisis. It's the largest settlement with a single company in U.S. history.
From that settlement, $4 billion must go to help the millions of families who saw the values of their homes plummet and who still struggle to keep up with mortgage payments.
But this is not the first multibillion-dollar mortgage settlement. In 2012, the federal government reached a $25 billion agreement with five major banks, including JPMorgan. A portion of that money was also intended to help homeowners.
How far has that settlement come and what lessons does it have for future deals?
The banks' compliance with the 2012 settlement is still under review, but they report that more than 600,000 borrowers have received help — representing an average of $79,742 per borrower, according to the Office of Mortgage Settlement Oversight.
That may not be exact, but federal monitor Joseph Smith says that it's a "significant number of people." Smith will also oversee the implementation of Tuesday's JPMorgan Chase settlement.
Not everyone has been able to stay in their homes, though: A number of people have been relieved of debt by giving up their homes.
"I do think it is only fair to say that there are times when a short sale or a deed-in-lieu is the least worst option for a distressed borrower," Smith tells NPR's Arun Rath. Rather than being tied to the home, these people can walk away from the property and start over, he says.
"Keeping people in their homes was the most important and the predominant need or the predominant goal of the settlement — but it wasn't the only one," Smith says.
In addition to consumer relief, the 2012 settlement also established more than 300 "servicing standards" to change how banks do business with borrowers.
"The ultimate test of success is whether our work is resulting in better treatment of distressed borrowers," Smith said at the American Mortgage Conference in September.
Smith and his team are still working on reports of how far the banks have come in this area. Still, he says, there has been progress overall: "I think the trend of these settlements has been to address the problems that not only caused the meltdown but [those that] resulted from it."
Without all of the results in hand, there are already some lessons that have been learned, Smith says.
Criticisms of the national mortgage settlement have been taken into account with the new JPMorgan Chase settlement, he says. In addition to relief to keep people in their homes, for example, there will also be funding to reduce blight in areas with rundown and abandoned homes.
"I think we've gotten this off to a start, and I don't think anyone can say the federal working group the president set up doesn't pack a punch," says New York Attorney General Eric Schneiderman, a co-chair of the working group tasked with righting the wrongs of the foreclosure crisis.
Schneiderman was an architect of both the 2012 national mortgage settlement and this week's JPMorgan Chase settlement. He sees it as a victory.
"This is a huge win, and I think we're gonna be able to — with this settlement and others to follow — really boost the housing market in our state and get a lot of people out from under water and see housing prices starting to go up again, which is good for everybody," he says.
But housing advocate Bruce Marks of the Neighborhood Assistance Corporation of America says "the crisis is still there." The settlement should purely be about restitution for homeowners and the impacted communities, he says. Plus, there should be graver consequences for the banks, Marks says.
"The only way you're going to send a message to these banks in the future is if you do the criminal prosecution," he says.
While JPMorgan Chase did not admit any wrongdoing as part of this latest settlement, the agreement does leave the door open to future criminal prosecutions of bank executives.
As the country still grapples with the effects of the 2008 crisis, Congress is working on preventing the next one. New licensing rules limit who can give mortgages, and lawmakers are considering ways to change how the mortgage market is funded.
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