In the largest deal ever to address the housing crisis, federal and state officials on Thursday announced a $26 billion foreclosure settlement with five of the largest home lenders.
The deal settles potential state charges alleging improper foreclosures based on "robosigning," seizures made without proper paperwork.
Most of the relief will go to those who owe far more than their homes are worth, which is known as being underwater on the loans. That relief will come over the course of the next three years, with the banks having incentives to provide most of the relief in the next 12 months.
The deal is the second biggest state settlement ever reached, trailing only the $206 billion settlement reached in 1998 between state attorneys general and the tobacco industry.
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