Last week, the Obama administrationÂ announced a settlementÂ with the nation’s five biggest banks over charges of mortgage fraud. This settlement between the banks and 49 states (Oklahoma has not signed on) amounts to an estimated $27 billion. The sum would be paid out in the formÂ of principle reduction and restitution checksÂ to homeowners and people who have lost their homes to foreclosure.
Yes, this is the largest payout by the banks since the start of the financial crisis. But we know that this amount can only begin the process of rectifying the damage the banks have done.Â TheÂ Washington Post reportsÂ that about 1 million households will have the size of their home loan reduced. An additional 750,000 families or individuals who lost their homes to foreclosure will receive checks of about $2,000 each.
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Bank settlement leaves much to be desired