Foreclosure Relief Settlement- $26 Billion Dollars!

Today the US Attorney General annouced a settlement of $26 billions dollars with Bank of America, Wells Fargo, Chase, Citigroup, and Ally Financial. The settlement is in response to charges against the big banks for fradulent foreclouse practices (i.e.-robo-signing) and to provide relief to millions of homeowners who are struggling with their mortgages.

Here is the breakdown of the $26 Billion settlement, one of the biggest settlements in US history.

$17 Billion will go to reduce principal balances for homeowners who are upside down on their mortgage. The average principal reduction per homeowner is estimated to be about $20,000.

$3 Billion will go to refiancing mortgages to lower rates.

$5 Billion will go to each of the 49 states involved in the deal (Oklahoma is the only state to opt out of the settlement agreement). From those funds, $1,500 to $2,000 wil go to those homeowners who lost their homes to foreclosures. Some funds will go to legal aid and other homeowner advocate organizations.

$1 Billion will be paid by Bank of America to the Federal Housing Adminsitration to settle charges of fradulent practices by Countrywide Financial.

Categories: Chapter 13, Chapter 7