Nightly News | February 09, 2012
>>> tell us one in every four homeowners in this country is currently under water, meaning they owe more on the mortgage than the house is worth. aside from the enormous damage the foreclosure mess caused, a big complaint across this country continues to be nobody paid for it. well, today the president announced a settlement between the feds, state attorneys general and the nation's five largest banks to help distressed borrowers and struggling homeowners. the problem? like so many other government plans, it's the details. and the real pay-off. already real questions tonight are out about who gets helped in this. we begin our coverage this evening with nbc's kristen welker.
>> reporter: the president says the $25 billion settlement will require america's five biggest banks to right the wrongs of the foreclosure crisis.
>> they'll reduce loans for families who owe more on their homes than they are worth and deliver some measure of just is to for families that are victims of abusive practices.
>> reporter: of the deal, $750,000 could qualify for payments of as much as $2,000. tim and his wife and son lost this home a year and a half ago after he lost his job, and his wife lost her business. he may qualify for a check.
>> i think it's a token amount. the whole settlement is a sham and an insult to homeowners like myself.
>> reporter: most of the settlement money would go to reduce loan balances for about 1 million families who are delinquent on payments and owe more than their homes are worth. some families under water but current or payments could be helped, allowed to refinance at lower rates. deelt would help only a fraction of the 11 million homeowners now under water. no one whose loan is held by fannie mae or freddie mac . many consumer groups are supportive.
>> i think this had the potential to do real good for american homeowners. it's not close to being enough, but a step in the right direction.
>> reporter: as the california attorney general praised the settlement, outside there were protests. other consumer groups and many experts say the banks got off easy.
>> the banks come out the big winners because the costs they are paying are very small in terms of the damages that were done.
>> reporter: the five banks together earned more than $46 billion in profits last year, yet under the settlement, they have to pony up only $5 billion in hard cash. in return for the settlement, administration officials say banks will be spared further state or federal lawsuits relating to servicing issues, but they can still be sued for abuses in originating or packaging risky loans. kristen welker, nbc news, the white house .