After months of painstaking talks, government authorities and five of the nation’s biggest banks have agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners harmed by the bursting of the housing bubble, state and federal officials said in Washington on Thursday.
It is part of a broad national settlement aimed at halting the housing market’s downward slide and holding the banks accountable for foreclosure abuses.
Under the plan, federal officials said, about $5 billion would be cash payments to states and federal authorities, $17 billion would be earmarked for homeowner relief, roughly $3 billion would go for refinancing and a final $1 billion would be paid to the Federal Housing Administration.