A draft settlement between mortgage companies and States that would allow the nation’s biggest banks to pay out billions in compensation for a raft of foreclosures has public interest groups across the political spectrum upset over the deal that was made behind closed doors, Fox News reported.
According to the news outlet, the deal is being strong-armed by the President Barack Obama Administration despite the opposition. The draft proposal was sent to State officials on January 23, and is supposed to overhaul the mortgage industry and help homeowners.
The deal would let the country’s five largest mortgage lenders pay out as much as $25 billion to cover new terms for homeowners who were driven out by foreclosure. However, people who lost their homes are unlikely to get them back or see much financial gain from the agreement, according to Fox News.
The Associated Press reported that officials from California are refusing to sign the proposed settlement, as they have called the deal between the State and five major banks – Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial – inadequate.