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Financial Giants Strike Settlement To Help Mortgage Crisis

Written by Shirin Rajaee

Story Created: Feb 10, 2012 at 1:25 AM PDT

Story Updated: Feb 10, 2012 at 9:02 AM PDT

Santa Barbara- In an announcement today, the nation's top mortgage lenders are forced to pay 26 billion dollars -- for their role in the mortgage mess. The settlement is a long-overdue relief for victims of foreclosure abuses. The deal will reduce loans for some Americans who owe more than their homes are worth and send checks up to two-thousand dollars to some who were improperly foreclosed upon.

The five financial giants: Bank of America, JP Morgan Chase, Wells Fargo, Citigroup, and Ally Financial --have settled with 49 states. They will either be refinancing mortgage rates or modifying mortgages altogether.

The bulk of the money will go to California and Florida, two of the states hardest hit by the housing crisis. Economists say the average homeowner - could see $20,000 knocked off what they owe.

KEY News Reporter Shirin Rajaee reports
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