It's been years since the mortgage crisis threw our country into financial collapse, but we're still dealing with the economic repercussions of those events.
However, there's a silver lining: The banks who committed foreclosure abuses are finally being held accountable for their actions—to the tune of $26 billion.
On Thursday, government officials announced that five banks, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, will pay almost $20 billion to help cut loan balances for homeowners on the brink of foreclosure and to refinance the mortgages of homeowners who owe more than their homes are worth. The rest of the settlement will be paid to states, federal authorities and the Federal Housing Administration.
The Effects of the Deal
Approximately one million homeowners will be immediately helped by the deal. Additionally, the banks' payments to the government may also help fund housing programs like the refinancing program that President Obama recently announced.
That said, the agreement is not a magic potion with the power to cure the housing industry's ills, and the government intends to continue investigating other housing-related abuses by the banks. Since 2007, four million Americans have their houses foreclosed upon; President Obama has said, "We’re going to keep at it until we hold those who broke the law fully accountable.”