U.S. seals mortgage settlement with top banks

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Source: cnn

U.S. seals mortgage settlement with top banks

By Mary Ellen Podmolik Tribune staff reporter

1:50 p.m. CST, February 9, 2012
Federal and state officials announced Thursday morning a $25 billion settlement of a long-running probe into allegedly shoddy foreclosure practices at the nation's five largest banks, a deal that will include more than $1 billion in assistance to former and current Illinois homeowners.

The agreement between the federal government, state attorneys general and the five banks -- Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial formerly known as GMAC -- will not help former homeowners get back properties they lost to foreclosure, even if there was wrongdoing by loan servicers in the foreclosure process. Nor will its limited scope assist all current homeowners who find themselves in financial straits or severely underwater. Most notably, the agreement does not cover mortgages held by Fannie Mae and Freddie Mac.

Still, the deal will provide some relief to financially distraught homeowners in danger of losing their homes while making it easier for current borrowers to refinance. The settlement, a year in the making, also seeks to reform mortgage servicing practices to lessen the chances of similar problems occurring again.

It is the largest joint state-federal settlement in history, and involves banks that collectively service almost 60 percent of the nation's mortgages.

Read more: http://www.chicagotribune.com/business/breaking/chi-robisigning-settlement-to-be-finalized-20120209,0,1608260.stor

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1. See also

http://www.forbes.com/sites/danielfisher/2012/02/09/states-feds-to-announce-25-billion-mortgage-settlement/

http://bottomline.msnbc.msn.com/_news/2012/02/09/10363120-what-the-mortgage-settlement-means-to-you

http://bucks.blogs.nytimes.com/2012/02/09/how-to-know-if-youll-benefit-from-the-mortgage-settlement/