The federal government today announced a record $25 billion settlement with the five biggest banks that were related to widespread foreclosure abuse that nearly annihilated the nation's housing market, ABC News reports.
The deal is the largest multi-state settlement since the Tobacco Settlement in 1998, the Department of Justice said. Among the money allocated will be $1.5 billion distributed nationwide to about 750,000 borrowers who lost their homes to foreclosure.
Attorney General Eric Holder said the deal by 49 state attorneys general, who worked late into the hours of last night, does not preclude states from pursuing their own suits against the banks. The state attorney general of Oklahoma did not sign the settlement.
Holder announced further terms of the deal would be on the website, NationalMortgageSettlement.com, and residents of the states involved should visit the sites of their respective attorneys general.
Department of Housing and Urban Development Secretary Shaun Donovan said the settlement holds banks accountable for abuses against homeowners which "continued long after people got the keys to their new home."
"No more lost paperwork, no more excuses, no more rhetoric," Donovan said.
Donovan said the investigation comprised at least 15,000 hours of reviewing thousands of files of Federal Housing Adminstration insured loans.
The total figure in the settlement could be as much as $45 billion if other large mortgage servicers sign on and all the banks participate fully, officials said.
While this is indeed good news for some families, we hope that the federal government continues to hold banks accountable for this far-reaching debacle that persists today. The new financial-crimes unit dedicated to investigating and prosecuting "large scale" financial fraud, announced by President Obama during his State of the Union address, should help bring justice to scores of homeowners and former homeowners who are still suffering from the repercussions of the illicit actions of some bankers.
Read more at ABC News.