Feb 10, 2012 8:17 AM GMT
U.S. banks agree to $25 billion in homeowner help
"California, the state that has suffered around one-third of the country's foreclosures in the past few years, will receive an outsized portion of the relief, some 45 percent, after its attorney general held out for a better deal."
"The five lenders involved in the deal serviced 56 percent of all loans last year, according to Inside Mortgage Finance data.
Under the settlement, roughly 750,000 borrowers who lost their homes to foreclosure between 2008 and 2011 can expect to receive a $2,000 cash payment.
The banks would also provide $17 billion in principal reduction and loan modifications for delinquent borrowers who are facing foreclosure.
The deal includes $3 billion to help borrowers who are current on their mortgage payments but unable to refinance because they owe more than their homes are worth.
Further, banks agreed to new servicing standards, including stricter oversight of foreclosure processing and a single-point-of-contact for borrowers.
The program is designed to last for three years, but includes incentives for banks to provide relief within the first year."