The New York Times
Wednesday, February 8, 2012 -- 9:11 PM EST
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States Reach $25 Billion Deal With Banks Over Foreclosure Abuses
More than two million American homeowners will get at least $25 billion in relief from the nation's biggest banks as part of a broad settlement to be announced as early as Thursday with state and federal authorities. It is the latest effort by the government to halt the housing market's downward slide.
Despite the billions earmarked in the accord, the aid will help only a relatively small portion of the millions of borrowers who are delinquent and still facing foreclosure. The success could depend in part on how effectively the program is implemented, because earlier attempts by Washington to help troubled borrowers aided far fewer than had been expected.
Still, the agreement marks the broadest effort yet to help borrowers who owe more than their houses are worth, with roughly 1 million to see their mortgage debt reduced by banks. In addition, 300,000 homeowners are to be able to refinance at lower rates, while another 750,000 people who lost their homes to foreclosure between September 2008 and the end of 2011 will receive checks for about $2,000.
Brokered by officials in Washington, the final details of the pact were being negotiated until the last possible minute, including how many states would participate and when the formal announcement would be made in Washington. The two biggest holdouts, California and New York, now plan to sign on, according to officials familiar with the negotiations.
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