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Foreclosure Settlement: Billions to Owners

The $25 billion settlement between the U.S. government and state attorneys general and the country’s five biggest banks for foreclosure processing problems that came to light about 18 months ago gives lenders three years to provide financial relief to financially troubled home owners.

NAR doesn’t have a position on the settlement, but its leadership has said it hopes the resolution helps more struggling homeowners stay in their homes, and that the settlement provides lenders the certainty they need to proceed again with loan modifications, short sales, and foreclosures, which will help support the housing market recovery.

Here are some details on the settlement:

  • The banks will dedicate $20 billion toward various forms of financial relief to borrowers.
  • Of that amount, $10 billion will go toward reducing the principal on loans for borrowers who, as of the date of the settlement, are either delinquent or at imminent risk of default and owe more on their mortgages than their homes are worth.
  • At least $3 billion will go toward refinancing loans for borrowers who are current on their mortgages but who owe more on their mortgage than their homes are worth.
  • Up to $7 billion will go towards other forms of relief, including forbearance of principal for unemployed borrowers, anti-blight programs, short sales and transitional assistance.

Read details of the settlement from the U.S. Attorney General’s office.

NAR video on background on the foreclosure problems.

Access the full video of President Obama’s remarks on the settlement.

Robert Freedman

Robert Freedman is manager of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at rfreedman@realtors.org.

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Comments
  1. It’s nice to know the government has a plan for all this. Thanks for your post.

  2. Thanks for this post. Good thing the government has finally taken action! This will be a relief to home owners.

  3. wow this is good news. plus lower interest rates. I love 2012

  4. Dawn Shevlin - SW Florida Realtor

    What is wrong with all you people!!?? This will not help. My God, why do you all think the government is helping? They are the cause of it all, they are keeping it all going, these mtg. assistance programs are a scam! The only principle reductions I have seen in 4 1/2 years are on short sales. Selling for a lesser amount is their principle reduction. NO one gets that. In fact if a deal is made to keep the homeowner in their home, their principle goes UP. Besides, where the hell do you think the 25 billion is coming from!? We do not have the money. It is being printed to fund nothing more then a ponzi scheme with proceeds going to banks and Obama. You’re all insane to support this crap. MILLIONS and MILLIONS are losing their homes. Nothing is clearing out. Get your dam heads out of the sand. I have to pay this association to support this nonsense and it makes me sick. Thanks for nothing NAR.

  5. :( Not entirely sure how I feel about this…

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