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A foreclosed home stands boarded up on Feb. 9, 2012 in Islip, N.Y.

Kai Ryssdal: Remember a month or so ago, there was all that hoopla about a big settlement between banks and regulators over mortgage fraud? We had Secretary of Housing Shaun Donovan on the broadcast talking about it, $25 billion to take care of charges of robosigning and improper foreclosures. We mentioned at the time that we hadn't seen the actual agreement yet. What the paperwork actually said.

Well, now we've seen it. It was filed in federal court in Washington this afternoon. We asked Marketplace's Nancy Marshall Genzer to find out what took so long, and what the delay has meant for homeowners waiting for help.


Nancy Marshall-Genzer: The deal is expected to help about a million borrowers with payments, refinancing and reductions in what they owe. The settlement involves  banks, federal agencies, state attorneys general and banking regulators.

Scott Talbott is chief lobbyist for the Financial Services Roundtable. He says with that cast of characters and the size of the deal, delays were inevitable.

Scott Talbott: There’s a substantive piece here, there’s an economic piece and there’s a political piece as well. So all those boxes had to be checked to help us get to the point where we are today to help the homeowners.

Among the homeowners who could be helped: 34-year-old Ben Krueger. He and his wife are underwater on their Minneapolis home, but current on their mortgage payments. Krueger says homeowners in the most dire situations should get priority, but he’s glad the settlement sets money aside to help people like him.

Ben Krueger: They still have their houses underwater, they’re still having the progress they thought they would have in life impeded by this dip in the housing market. Everybody’s lost the equity in their house.

For Krueger, that’s meant postponing plans to buy a bigger house after the birth of his 7-month-old son. He’s also hoping the settlement will help prevent more foreclosures in his neighborhood, which drive down the value of his home.

Across the country, in the Los Angeles area, Francesca Lia Block is  guardedly hopeful. The home she bought in 2007 is now worth $150,000 less than she paid for it. The deal between the government and banks requires banks to assign a single person to work with some homeowners. Block has been trying to negotiate with Bank of America for a year.

Francesca Lia Block: I got off the phone crying hysterically, you know, a few times.

Block says she was passed around from person to person and would just like one bank representative to deal with to sit down with and lay it all out, to see if she can find a way to stay in her home.

Block: See, you know, this is what I have, this is what I can afford. What do you need from me? Please let me know.

Block’s case is complicated. She bought her home under her mother’s name, then her mother died. Bank of America says it can’t help until the house is in her name. Block says she’ll keep working on that, and hope to eventually have that face-to-face meeting.

In Washington, I’m Nancy Marshall-Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.

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