In his recent State of the Union Address, President Obama discussed the federal government's efforts to provide relief to Americans dealing with foreclosure. A deal has been negotiated with five major banks that applies to private mortgages obtained between 2008 and 2011. The final agreement between the government and banks is expected to take place in the coming weeks. Ohio home owners dealing with foreclosure may now be wondering how this deal might affect them.

The deal comes in response to the deceptive lending practices that led people to lose their homes. Among the major banks expected to sign on to the $25 billion agreement are Bank of America, JP Morgan Chase, Citibank, Wells Fargo, and Ally Financial.

Unfortunately for many that lost their homes, this settlement may not even apply to them. Any mortgages through public agencies -- such as Freddie Mac and Fannie Mae -- are not included in this deal. Public institutions are responsible for nearly half of home loans in the United States.

Most of the $25 billion will be used to relieve homeowners of some debt. Right now, 11 million Americans owe more on their mortgage than their home is worth. Yet only 1 million of these people are likely to get any relief under this agreement. Those individuals could see about $20,000 of debt removed from their mortgage.

One of the most vocal opponents of this plan is Ohio Senator Sherrod Brown, who believes this deal does not do enough to ease the burden of those affected by foreclosure. He believes this agreement is only a "slap on the wrist" for irresponsible mortgage lenders.

Those in Ohio dealing with foreclosure are in need of some relief, but many may not even be affected by this massive federal deal. Those who might lose their home should consider contacting an experienced and trusted legal professional to inform them of their legal rights under these difficult circumstances.


Source: CBS MoneyWatch, "$25B foreclosure deal: What it could mean for homeowners," Ilyce Glink, Jan. 24, 2012