foreclosure-home-boarded-upYesterday, the White House and the attorneys general of 49 states announced an agreement with the nation’s five largest mortgage providers — Ally Financial, Bank of America, Citigroup, JP Morgan, and Wells Fargo — to provide at least $26 billion to address mortgage and foreclosure abuses. It will not only help thousands of working families now, it will establish new protections for homeowners going forward.

President Obama praised the “landmark settlement” which targets the irresponsible practices of lenders that created the housing crisis.

Obama announces mortgage settlement w Eric Holder“Under the terms of this settlement, America’s biggest banks — banks that were rescued by taxpayer dollars — will be required to right these wrongs. These banks will put billions of dollars towards relief for families… They’ll provide refinancing for borrowers that are stuck in high interest rate mortgages. They’ll reduce loans for families who owe more on their homes than they’re worth. And they will deliver some measure of justice for families that have already been victims of abusive practices.”

All told, Obama said this isn’t just good for those families — “It’s good for their neighborhoods, it’s good for their communities, and it’s good for our economy.”

The Washington Post says the deal was “brought on by revelations that banks were using forged and shoddy paperwork to foreclose rapidly on struggling homeowners, a practice known as “robo-signing.” Outrage over those practices led to 16 months of settlement talks between state and federal officials and five large banks.”

(READ more from the Washington Post)

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