What Will the Mortgage Deal Mean For You

The long-awaited $26-billion foreclosure settlement between the government and the biggest banks was announced on Thursday.   Although that sounds like a lot of money, it’s nothing compared to the trillions lost since the credit bubble burst in 2008.

Who’s eligible?

All states took part except for Oklahoma. Unless Oklahoma signs on, borrowers there will be excluded.   About a million homeowners will get a refinance or have their loan balance paid down somewhat. In addition, some people who have already lost a home to foreclosure will get small payments.

The Banks involved.

You’re possibly in the running for a piece of the settlement if your loan is “serviced” (mortgage payments are collected) by Wells Fargo, Ally Financial, Bank of America, JPMorgan Chase and Citigroup. They manage payments on 55% of American home loans.

The Breakdown of the Settlement

• $5 billion in cash payments to states and federal agencies
• $17 billion to help homeowners
• $3 billion for refinancing
• $1 billion for the Federal Housing Administration

Read more at The Wall Street Journal