Foreclosure is the process of taking back property (often real property, such as a house) that was bought with borrowed money because the borrower is not able to pay back the money as agreed.
In February 2012, the US federal government came to a $25-billion settlement with five banks: Ally Financial Inc., Bank of America Corp., JPMorgan Chase & Co., and Wells Fargo & Co. Many companies had processed foreclosures without confirming documents.
Another $1.4 billion in relief was provided by refinancing 37,396 home loans with an average principal balance of $210,398. As a result, each borrower will save about $409 in interest payments each month, according to the report.
The agreement will reduce mortgage loans for only about a million of the 11 million Americans who owe more than their homes are worth.(= negative equity)