So its official, 49 states have agreed to a $25 Billion plus settlement with the five biggest Banks. The result of a 16 month investigation by the Justice Department and the States Attorney Generals from at least 15 states.

Bank of America, Wells Fargo & Company, Citibank, Ally Financial (the new name for the old GMAC Mortgage) and J P Morgan Chase Bank and certain of their subsidiaries have committed at least $17Billion dollars to directly assist borrowers through relief options including, in some cases, principal reduction. It is estimated that direct relief to homeowners could total $32Billion. Aid to homeowners needing loan modifications: Including first and second lien principal reduction. The servicers are required to work off up to $17 billion in principal reduction and other forms of loan modification relief nationwide within the next 3 years.

State attorneys general anticipate the settlement's requirement for principal reduction will show other lenders that principal reduction is one effective tool in combating foreclosure and that it will not lead to widespread defaults by borrowers who really can afford to pay. Aid to borrowers who are current, but underwater. Eligible borrowers will be able to refinance at today's historically low interest rates. Servicers will have to provide up to $3 billion in refinancing relief nationwide. Direct payments to borrowers who lost their homes to foreclosure. With no requirement to prove financial harm and without having to release private claims against the servicers or the right to participate in the Office of the Comptroller of the Currency review process. If you were active in the foreclosure process between January 1, 2009 and December 31, 2010 with any of the participating servicing entities you will receive information directly from the Office of the Comptroller of the Currency before the end of 2012.

So what does this mean for you?

If you currently have a mortgage with any of these lenders, or were in the forecxlosure process with one of them or their servicing entities, you may be eligible for relief.

Because of the complexity of the mortgage market and this agreement, which will be performed over a three-year period, borrowers will not immediately know if they are eligible for relief. For loan modifications and refinance options, borrowers may be contacted directly by one of the five participating mortgage servicers.

Keeping in mind the timeline above, you may contact the banks directly if you need additional information:

oBank of America: 877-488-7814

oCitibank: 866-272-4749

oChase: 866-372-6901

oGMAC/Ally: 800-766-4622

oWells Fargo: 1-800-288-3212