Foreclosure deal attracts 3 more states

Foreclosure deal has 3 more states

Three more U.S. states are joining a long-awaited nationwide foreclosure deal. They are Arizona, Michigan and Florida, which are among the hardest hit of the housing crisis.

More than 40 other states have earlier agreed to the foreclosure deal that would force the five largest mortgage lenders to reduce loans for about 1 million households. The remaining states including California, Delaware, Massachusetts, New York and Nevada are hoped to sign on in the coming days.

The foreclosure deal would benefit homeowners who are behind on their payments and owe more than their homes are worth. The lenders would also send checks for about $2,000 to hundreds of thousands of people who lost homes to foreclosure.

Promising to reshape long-standing mortgage lending guidelines, the settlement would end a painful chapter that emerged from the 2008 financial crisis. It would make it easier for those at risk of foreclosure to make their payments and keep their homes.

However, those who lost their homes to foreclosure are unlikely to get their homes back or benefit much financially from the said deal. And only those privately held mortgages issued from 2008 through 2011 are applicable.

The deal still needs a federal judge approval.

Source: The Associated Press