Monday's foreclosure settlement doesn't close the book on the housing crisis, which caused more than 4 million foreclosures. It covers only consumers who were in foreclosure in 2009 and 2010. Some banks didn't agree to the settlement. And resolving millions of claims involving multiple banks and mortgage companies is complicated and time-consuming.
"It's going to take a few more years to get it sorted out," said Bert Ely, an independent banking consultant.
Michael Allen of Petersburg, Va., hopes to benefit from the settlement. He lost his home last month after 2½ years of trying to modify his mortgage. He had fallen behind on his payments after the plant he was working closed.
"I was working with the banks to re-modify (my loan), and I'd get to the final stages and I'd have to start over again. They didn't give me any reason. I'd call them, they'd transfer me from one person to the next. ... They just kept giving me the runaround."
Citigroup said in a statement that it was "pleased to have the matter resolved" and thinks the agreement "will provide benefits for homeowners." Citi expects to record a charge of $305 million in the fourth quarter of 2012 to cover its cash payment under the settlement. The bank expects that existing reserves will cover its $500 million share of the non-cash foreclosure aid.
Bank of America CEO Brian Moynihan said the agreements were "a significant step" in resolving the bank's remaining legacy mortgage issues while streamlining the company and reducing future expenses.
Amy Bonitatibus, spokeswoman for JPMorgan Chase, said the bank had "worked very hard" on the foreclosure review and was "pleased to have it now behind us."
U.S. Bancorp, which owns U.S. Bank, said its part of the settlement includes an $80 million payment to homeowners. That payment will reduce its fourth-quarter earnings by 3 cents per share. It has also committed $128 million in mortgage aid.
Leaders of a House oversight panel have asked regulators for a briefing on the proposed settlement. Regulators had refused to brief Congress before announcing the deal publicly.
Rep. Elijah Cummings of Maryland, the top Democrat on the House Committee on Oversight and Government Reform, said the settlement "may allow banks to skirt what they owe and sweep past abuses under the rug without determining the full harm borrowers have suffered."
He complained that regulators failed to answer key questions about how the settlement was reached, who will get the money and what will happen to others who were harmed by these banks but were not included in the settlement.
The settlement is separate from a $25 billion settlement among 49 state attorneys general, federal regulators and five banks: Ally, formerly known as GMAC; Bank of America; Citigroup; JPMorgan Chase and Wells Fargo.
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Associated Press writers Steve Rothwell in New York, Mike Schneider in Orlando, Fla., and Marcy Gordon in Washington contributed to this report.
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Daniel Wagner can be reached at www.twitter.com/wagnerreports .
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