$25 billion foreclosure settlement announced

President Obama announced the $25 billion home loan mortgage settlement alongside Attorney General Eric Holder (L) and Shaun Donovan, Secretary of Housing and Urban Development (HUD).

The Pulse quickened today on news that some justice is coming to the creators of a housing bubble in the U.S. that culminated in a seemingly endless foreclosure fiasco.

How much justice? About $25 billion worth.

Attorneys general of every state except Oklahoma came to a deal today with five major U.S. lenders in an attempt to right some of the wrongs of banks, from so-called “robosignings” to improper foreclosure practices.

The agreement will see B of A, Chase, Wells Fargo, Citi and Ally Financial reduce the loan amounts of nearly a million American households. Another 750,000 households will receive a $2,000 check as compensation for being improperly foreclosed on.

The settlement also stipulates banks make foreclosure their last resort, and they will now be barred from foreclosing on a homeowner under consideration for a loan modification.

A website has been set up to help homeowners figure out if they’re due anything in the settlement. On the homepage, it spells out in plain language the crimes that led to this moment: “The agreement settles state and federal investigations finding that the country’s five largest loan servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct. Both of these practices violate the law.”

When announcing the deal today, President Obama made his feelings about the agreement clear. “This isn’t just good for these families,” he said firmly. “It’s good for their neighborhoods, it’s good for their communities and it’s good for our economy.”

About the author

Joel Patterson is the Associate Producer of Marketplace Money.

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