The Justice Department has announce today that Bank of America, Wells Fargo, Citigroup, JPMorgan Chase and Ally Financial will pay a $26 billion settlement to American homeowners who have suffered from high interest rates or foreclosure. It is said that about $20 billion of the settlement money will be going to homeowners for mortgage debt reduction and lower rate refinances and about $1.5 billion will be given to previous homeowners who lost their homes to foreclosure between 2008 and 2011.
The banks have three years to distribute the money, therefore creating apprehension by experts of the actual boost this may have on the economy. The breakdown of money to be given by each bank is as followed:
- Bank of America - $11.8 billion plus an additional $1 billion for Federal Housing Administration loans
- Wells Fargo - $543 billion
- JPMorgan Chase - $5.3 billion
- Citigroup - $2.2 billion
- Ally- $310 million
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