Major Banks Announce $8.5B Mortgage Settlement - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Major Banks Announce $8.5B Settlement Stemming from Housing Crisis

Posted: Updated:

UNDATED- Ten major banks announced Monday they will pay $8.5 billion, putting to rest charges they wrongfully foreclosed on homeowners. It is all a consequence of the housing meltdown.

The deal covers borrowers whose homes were in foreclosure in 2009 and 2010. This gives $3 billion in direct payments to wronged borrowers, and more than $5 billion in mortgage assistance. Hundreds of thousands of people could be compensated, which could mean up to $125,000 for those affected.

One bank in particular is shelling out even more settlement money on top of that. Bank of America is one of those ten financial institutions attempting to "right the wrong," and will also pay out more than $10 billion to settle mortgage claims.

Robin Short of Roxana, Del. has already seen the benefits of banks giving back to homeowners. Short thought she was on the verge of losing her home, after going through a divorce and taking out a second mortgage. But that quickly changed.

"I received a letter from the bank because of foreclosure status," Short explained. "And when I received the letter, I called right away and they said it wasn't there anymore, that it was paid in full and I'm like, somebody's made a mistake."

Turns out, it was no mistake.

"They had mentioned something about this is something that the bank is doing for different people," Short said.

Short is one of hundreds of Delawareans who benefited from a national foreclosure settlement last year, with the five largest mortgage banks, including Bank of America.

In response, Delaware Attorney General Beau Biden released the following statement: "There is a lot more that needs to be done, but these benefits can make a critical difference in a homeowner's financial life. Our housing market only works when everyone plays by the rules."

And with "more" now being done, people like Short are rejoicing.

"It's a blessing," she remarked. "I mean, it's a blessing that they've done this for us. It couldn't come at a better time."

Some argue the settlement announced by the ten big banks, including Bank of America, Wells Fargo and Citibank, is too low, at the expense of the consumer.

Separate from that settlement, Bank of America announced it will pay $10.3 billion to Fannie Mae, essentially buying back those so-called bad mortgages.

  • Most Popular StoriesMost Popular StoriesMore>>

  • Delmar Man Gets 75 Years for Murder

    Delmar Man Gets 75 Years for Murder

    Thursday, April 24 2014 12:07 PM EDT2014-04-24 16:07:17 GMT
    A Delmar man convicted of second-degree murder in connection with a fatal shooting that occurred last year was sentenced to 75 years in prison Thursday, according to the Wicomico County State's Attorney's Office.More
    A Delmar man convicted of second-degree murder in connection with a fatal shooting that occurred last year was sentenced to 75 years in prison Thursday, according to the Wicomico County State's Attorney's Office. More
  • Fire at Berlin Main Street Restaurant

    Fire at Berlin Main Street Restaurant

    Thursday, April 24 2014 1:05 PM EDT2014-04-24 17:05:28 GMT
    BERLIN, Md. – The manager of Siculi Rustic Italian Restaurant said a small fire started in the kitchen of the restaurant, which is located on Main Street.More
    The manager of Siculi Rustic Italian Restaurant on Main Street in Berlin says a small fire started in the kitchen late Thursday morning.More
  • Fire Destroys Mid-Atlantic Family Practice in Lewes

    Fire Destroys Mid-Atlantic Family Practice in Lewes

    Thursday, April 24 2014 11:34 PM EDT2014-04-25 03:34:48 GMT
    Fire broke out at the Mid-Atlantic Family Practice office on Route 24 in Lewes this afternoon. Heavy black smoke was seen billowing from the building.More
    Fire broke out at the Mid-Atlantic Family Practice office on Route 24 in Lewes this afternoon. Heavy black smoke was seen billowing from the building.More
Powered by WorldNow

All content © Copyright 2000 - 2014 Worldnow and WBOC. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service