President Obama has announced a major foreclosure settlement with five of the nation’s biggest banks to help homeowners who are struggling to pay their mortgages or lost their homes to foreclosure. This morning, the President said:
We have reached a landmark settlement with the nation’s largest banks that will speed relief to the hardest-hit homeowners, end some of the most abusive practices of the mortgage industry, and begin to turn the page on an era of recklessness that has left so much damage in its wake.
By now, it’s well known that millions of Americans who did the right thing and the responsible thing—shopped for a house, secured a mortgage that they could afford, made their payments on time—were, nevertheless, hurt badly by the irresponsible actions of others: by lenders who sold loans to people who couldn’t afford them; by buyers who knew they couldn’t afford them; by speculators who were looking to make a quick buck; by banks that took risky mortgages, packaged them up, and traded them off for large profits.
These practices were plainly irresponsible. And we refused to let them go unanswered. So about a year ago, our federal law enforcement agencies teamed up with state attorneys general to get to the bottom of these abuses. The settlement we’ve reached today, thanks to the work of some of the folks who are on this—this is the largest joint federal-state settlement in our nation’s history—is the result of that extraordinary cooperation.
Under the terms of this settlement, America’s biggest banks—banks that were rescued by taxpayer dollars—will be required to right these wrongs. That means more than just paying a fee. These banks will put billions of dollars towards relief for families across the nation. They’ll provide refinancing for borrowers that are stuck in high interest rate mortgages. They’ll reduce loans for families who owe more on their homes than they’re worth. And they will deliver some measure of justice for families that have already been victims of abusive practices.
All told, this isn’t just good for those families—it’s good for their neighborhoods, it's good for their communities, and it's good for our economy.
Read the President's full remarks at whitehouse.gov.