The U.S. government and banks who hold mortgages are very close to reaching an agreement that would present some relief to nearly one million mortgage-holders who are underwater, Reuters reported. The agreement is expected to result in about one million mortgage write-downs.
“We’re very close to a settlement that would both fix the servicing problems, but also help over a million families around the country stay in their homes and get help,” saud Shaun Donovan, secretary of U.S. Housing and Urban Development.
Allegations about illegal foreclosures led to the talks, which have lasted more than a year. Currently, banks do not grant many principal reductions, Reuters said.
Some states have said that negotiators were too leniant with banks. [Reuters via MSNBC]