Washington, DC -- Congressman Eliot Engel (D-NY-17) praised the deal struck on Thursday to provide $26 billion in foreclosure relief for families struggling with their mortgages. 

The deal between the states and five of the largest home lenders will provide relief over the course of the next three years, with the banks having incentives to provide the most relief in the next 12 months.  The bulk of the settlement will go to reducing the principal owed by those who are underwater on their loans, and behind on their mortgages.

“New York’s homeowners and investors were hit especially hard by the economic impact of wrongdoing in the mortgage crisis.  This deal throws a lifeline to them, giving help for American families – one which is long overdue.  The FBI ranked New York as one of the top 10 states for known or suspected mortgage fraud.  I commend Attorney General Eric Schneiderman for his tireless efforts in providing New York a much-deserved voice in this process.  Finally, families who need help will get financial aid, and banks who helped break the system will be held accountable for their actions,” said Rep. Engel.

The agreement is the most comprehensive effort yet to help borrowers owing more than their houses are worth, with approximately one million people nationwide are expected to have their mortgage debt reduced by lenders or via refinancing. Another 750,000 people who lost their homes to foreclosure from 2008-11 will receive checks for about $2,000. In New York, more than 46,000 borrowers will receive some form of benefit, with an estimated 21,000 expected to see what they owe reduced.

The five banks/mortgage servicers in the deal are Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.

“There are about one in five Americans who owe more than their home is worth.  It was this bottoming out of the housing market which contributed so much to our near-depression at the end of the Bush Administration.  With the improved job market and the rebounding of the stock market, positive signs abound that our recovery could get better.  This deal helps the process.  If only the House Republican Majority would agree to work the minority, the Senate and the President to keep the momentum going on behalf of the American people, the recovery could really pick up steam.  We need a bipartisan solution in Washington, not more of the same bickering.  I am hopeful this deal will provide a springboard to that type of action,” added Rep. Engel.

Schneiderman is also heading a new mortgage crisis unit that will work with the U.S. Consumer Financial Protection Bureau.  The goal will be to hold accountable any institutions that violated the law, compensate victims, and help provide relief for homeowners struggling from the collapse of the housing market.

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