The Obama administration has been working on a deal to settle with major mortgage lenders over unsavory practices which led to the current crisis. Now the settlement will go to individual state Attorneys Generals for their approval.
Although people who have lost their homes because of fraudulent paperwork will not be able to get their homes back they will receive a small amount of financial assistance. The Washington Post reported that about 750,000 homeowners will be eligible for $1,800 in compensation.
The settlement will make it easier for thousands of homeowners facing foreclosure to restructure their loans and make their payments more affordable.
Part of the settlement will also write down the principle for underwater homeowners.
Foreclosure attorneys can help homeowner avoid foreclosure, but this agreement is intended to offer help to those who were subjected to wrongful foreclosure when the housing crisis began.
Attorneys Generals from New York and California have stated they did not want to be a part of the settlement because lenders were not thoroughly investigated for practices not covered by the settlement. They also oppose releasing lenders from future liabilities that may arise.
President Obama is expected to address the
foreclosure settlement in the State of the Union address on Tuesday.
