Bank of America, JP Morgan Chase, Citigroup, Ally Financial, and Wells Fargo along with state and federal leaders agreed on a $25 billion settlement for the mortgage industry, the largest single industry settlement since 1998.
The settlement is designed to $17 of the $25 billion is designated to proved mortgage relief to more than 1 million homeowners, $1 billion to the federal government, and $3 billion to mortgage servicers in order to them in the process of refinancing their current borrowers into loans with lower interest rates. The remaining money will be dispersed as restitution among homeowners who were foreclosed on between 2008 to the end of 2011.
If lenders violate the terms of the settlement penalties of $1 million per violation are in place and $5 million for repeat offenses.
President Obama said “This settlement is a start. We're going to make sure that the banks live up to their end of the bargain." the President went on to say "It's good for their neighborhoods, it's good for their communities, and it's good for our economy" as reported by USA Today.