• 24
  • January
    2012

Ever since it became clear just how bad the mortgage and foreclosure crisis was going to be, state and federal officials have been working to see what they could do to help distressed homeowners. Now, federal officials, states attorneys general and some of the country's biggest mortgage providers have reached a deal that could help some homeowners in Omaha who have been foreclosed upon.

Under the deal, about 1 million homeowners could have their mortgages reduced by as much as $20,000. The deal has not been officially announced, so details are still under wraps, but it seems this money would come from settlements with Bank of America, J.P. Morgan Chase, Citigroup, Ally Bank and Wells Fargo Financial.

Not all state attorneys general are pleased with the deal. The attorney general of Minnesota, for example, seems to think it does not go far enough either in punishing mortgage providers or in helping distressed homeowners. Although 1 million homeowners sounds like a big number, it is dwarfed by the number of homeowners who have been foreclosed upon or are looking at foreclosure (8 million) and by the number of people whose homes are "underwater," meaning more is owed on the mortgage than the home is worth (11 million).

Details of the deal are still being ironed out, but supposedly it will be announced on Wednesday, January 25.

If you are in trouble with your mortgage, hopefully this deal will help you. Either way, you may want to take the time to speak with an attorney who handles foreclosure issues. You may never need to use the information you learn, but it is always best to be as prepared as you can be.

Source: The Minneapolis Star Tribune, "Mortgage deal could aid homeowners on the brink," Nelson Schwartz and Shaila Dewan, Jan. 23, 2012