$25B nationwide mortgage deal goes to states

Yahoo is carrying the Associated Press story $25B nationwide mortgage deal goes to states.

A draft settlement between the nation’s major banks and U.S. states over deceptive foreclosure practices has been sent to state officials for review.

Those who lost their homes to foreclosure are unlikely to get their homes back or benefit much financially from the settlement, which could be as high as $25 billion. About 750,000 Americans could receive checks for about $1,800 under the deal.

This is the first report I have seen and is very sketchy as to details.

$25B seems like a paltry sum for the whole country. The direct damage the banks caused to the people they enticed into mortgage traps must be far more than that. The profits the banks made and the bailouts that they received is far larger than this.

I wonder how the banks would negotiate if nationalization of the banks were one alternative to a negotiated deal.

We will have to await a full analysis by the States Attorneys General and more thorough blogosphere to know if this is a reasonable deal.  I can only hope that the wording of the deal limits it to crimes committed over deceptive foreclosure practices, and that crimes created in initiating the mortgages in the first place are still open to prosecution.

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