There are new details about the massive mortgage settlement reached between 49 states and five major banks to help struggling homeowners.
The $26 billion deal involving the five biggest mortgage lenders in the country - Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo - is the largest joint federal-state settlement in the nation's history, and is about $1 billion bigger than had been expected.
One billion dollars of the $26 billion will go to the Federal Housing Authority. The rest of the $25 billion goes to homeowners.
On "CBS This Morning" business and economics correspondent Rebecca Jarvis outlined how the money will be spent:
- $17 billion will go towards reducing principal on mortgages;
- $3 billion towards refinancing;
- $1.5 billion towards payouts for improper foreclosures (This is the up to $2,000 that the 750,000 homeowners may see as a result of being foreclosed on, and is on a first-come, first-served basis); and
- $3.5 billion will go towards state and federal governments to deal with foreclosures.
Jarvis says relief for homeowners could be as long as three years away, but banks will receive incentives to speed up the process - and penalties if they miss deadlines.
"If they can do it in a year, they'll get points for that," Jarvis said. "By two years out, three quarters of all the money must be given out by the banks. "