A settlement between major banks, the Obama administration and state attorneys general announced Thursday could benefit both black homeowners and Kamala Harris, the African-American attorney general in California who was a major force in the agreement.
Under the deal, a group of five banks have agreed to pay $25 billion to current and former homeowners and states as restitution for fraudulent foreclosure practices that included use of “robo-signed” affidavits, failures to offer non-foreclosure alternatives and filing improper documentation in federal bankruptcy court, according to the Department of Justice.
PRESIDENT OBAMA DISCUSSES A $25 BILLION MORTGAGE RELIEF PACKAGE
About one million people will have debt on their home reduced or be able to refinance at lower rates, while another 750,000 whose homes were already foreclosed would receive checks for $2,000, according to the New York Times.
It’s not known exactly how many African-Americans will be among the nearly two million who get aid, but it’s likely thousands of blacks will benefit. The mortgage companies in the agreement include Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.
The settlement is part of a broader Obama administration push to resolve the housing crisis, which has become a drag on the broader economy as well as reducing the assets of millions of Americans.
Harris, who was elected in 2010, has been one of the major forces in the agreement, pushing the Obama administration to both toughen the agreement on the banks and make sure that states can still file their own suits against banks as well, which the final settlement does allow. Her role could be a boon for the rising star in California politics.
Follow Perry Bacon Jr. on Twitter at @perrybaconjr