The settlement documents filed with the federal court provide little detail about the misdeeds government investigations uncovered. But the documents devote hundreds of pages to detailing how different types of relief will count toward the banks meeting their obligations under the settlement.
The banks did not admit to the allegations laid out in the complaint as part of the settlement, but the government said its intention was to “remediate harms allegedly resulting from the alleged unlawful conduct.”
This article does provide a little more detail on the requirements for principal reductions. 30% of the relief provided under the settlement documents must be in the form of principal reductions for homeowners who owe 175% of their homes value. Banks are expected to bring a borrower’s monthly payments to within 31 percent of a borrower’s income, and establish a new loan value that is no greater than 120 percent of the value of the home.