The Justice Department and JPMorgan Chase & Co. reportedly could sign a $13 billion agreement today that would be the largest ever reached between the U.S. government and a corporation, several news sources are reporting. The final issue in the settlement was said by persons familiar with the talks (but not authorized to comment publicly) to concern $4 billion that would go to aid consumers. Here's a breakdown of how those funds from the nation's largest bank would be divided to aid homeowners, prospective homebuyers and others, according to the unnamed sources:
THE JPMORGAN CHASE DEAL -- HOW IT COULD HELP CONSUMERS:
About $1.5 billion will go toward reducing the amount owed on home loans, reports The Associated Press, including those homeowners who are "underwater" on their mortgages. And The New York Times says that these funds will be directed at areas hard-hit by foreclosures. Analytics firm CoreLogic reported in September that 7.1 million borrowers -- 14.5 percent -- were in negative equity on their mortgages, with a high concentration of those underwater homes being valued at less than $100,000.
About $500 million will go toward the bank "briefly halting the collection of mortgage payments," says The New York Times. A little over 4 percent of mortgage holders in the U.S. were behind on their house payments by at least two months, as of September.
Cities that have been plagued by foreclosed and abandoned properties will be the target of efforts to revitalize or remove those homes. The number of abandoned homes in Detroit (pictured above) was estimated at 78,000, the Detroit Free Press reported in August.