Obama Administration Settles Lawsuit with Banks, Assists Re-fi’s
American homeowners can breathe (a small) sigh of relief. The U.S. announced a $25 billion deal Thursday with the nation’s largest banks – after more than a year of bickering and about-faces – that would provide some help for people struggling to pay their mortgages.
The settlement comes after evidence emerged late in 2010 that banks robo-signed thousands of foreclosure documents without properly reviewing paperwork. The Obama administration hopes the pact will open a new avenue for housing relief because it will force the banks to write down mortgages at a time when roughly one in four borrowers owe more on their mortgage than their home is worth.