51°
Clear
TUE
 82°
 51°
WED
 82°
 54°
THU
 76°
 59°
FRI
 75°
 57°
SAT
 84°
 55°

States, banks reach $25 billion foreclosure-abuse settlement

  • Attorney General Eric Holder, center, accompanied by Housing and Urban Development (HUD) Secretary Shaun Donovan, right, Iowa Attorney General Tom Miller, and other federal and state officials announces a settlement regarding mortgage loan servicing and foreclosure abuse, Thursday, Feb. 9, 2012, at the Justice Department in Washington. (AP Photo/Cliff Owen)

WASHINGTON —States reached a landmark $25 billion deal Thursday with the nation's biggest mortgage lenders over foreclosure abuses that occurred after the housing bubble burst.

The deal requires five of the largest banks to reduce loans for about 1 million households at risk of foreclosure. The lenders will also send checks of $2,000 to about 750,000 Americans who were improperly foreclosed upon. The banks will have three years to fulfill the terms of the deal.

It's the biggest settlement involving a single industry since a 1998 multistate tobacco deal.

Federal and state officials announced at a news conference that 49 states had joined the settlement. Oklahoma announced a separate deal with the five banks.

The settlement ends a painful chapter that emerged from the financial crisis, when home values sank and millions edged toward foreclosure. Many companies processed foreclosures without verifying documents. Some employees signed papers they hadn't read or used fake signatures to speed foreclosures — an action known as robo-signing.


© The Press Democrat |  Terms of Service |  Privacy Policy |  Jobs With Us |  RSS |  Advertising |  Sonoma Media Investments |  Place an Ad
Switch to our Mobile View