Mortgage Deal for Foreclosed Owners will soon be a reality

New York and California will join just about all the other states in a settlement with the nation’s largest banks aimed at helping homeowners struggling with loans bigger than the value of their homes, according to a person familiar with the talks.

A few other states were still on the fence as of late Wednesday, the person said.

With those two big states, the deal could be worth as much as $25 billion when it is announced, either Thursday or Friday, another person familiar with the talks said.

Requests for comment to the New York Attorney General’s Office were not returned. A spokesman from the California Attorney General’s Office said the state was still in negotiations.

For more than a year, state attorneys general, regulators, federal officials and big banks have been in talks about a settlement of allegations of improper foreclosures based on “robosigning,” seizures made without proper paperwork.

As of Wednesday night, at least 42 had signed on, which would yield as much as $25 billion available for qualified homeowners. The deal marks the largest housing relief available “underwater” homeowners whose principal exceeds their home’s value, as well as those who have been foreclosed on, since the financial crisis began.

Source: CNNMoney