California and New York are moving closer to signing onto a $25 billion dollar multi-state deal that would force the five largest mortgage lenders to reduce loans for about 1 million households. More than 40 U.S. states have agreed to a nationwide settlement. Homeowners in states that opt out of the deal wouldn’t share in the settlement money.
The holdout states want to be sure they can still investigate Bank of America, JP Morgan Chase, Wells Fargo, Citigroup and Ally Financial if any other past wrongdoings are uncovered. And they want to spell out how much legal immunity banks would receive, because the deal would still allow for criminal charges.
The reduced loans would benefit homeowners who are behind on their payments and owe more than their homes are worth. The lenders would also send checks for about $2,000 to hundreds of thousands of people who lost homes to foreclosure.
Massachusetts, Nevada and Arizona are also considering whether to join the multi-state settlement.
Guest:
- Shaila Dewan, New York Times reporter
