U.S. banks agree to $25 billion in homeowner help

"The bottom line about this settlement, is it's okay, it's a step forward, it's a step in the right direction. But let's not kid ourselves, there's a hell of a lot more that needs to be done," said Ira Rheingold, executive director of the National Association of Consumer Advocates.

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The housing settlement gives President Barack Obama, as he seeks re-election in November, a chance to show his administration is willing to get tough with big banks to help ordinary Americans survive the pain of the nation's foreclosure crisis.

"We have reached a landmark settlement with the nation's largest banks that will speed relief to the hardest hit homeowners in some of the most abusive practices of the mortgage industry and begin to turn the page on an era of recklessness that has left so much damage in its wake," Obama said in a press conference on Thursday.

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Graphic on foreclosed properties: http://r.reuters.com/vet42s

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RELIEF BREAKDOWN

The deal with 49 states and federal agencies, including the U.S. Justice Department and the Department of Housing and Urban Development, is being billed as the largest federal-state settlement ever obtained.

It follows more than one year of negotiations after evidence emerged late in 2010 that banks robo-signed thousands of foreclosure documents without properly reviewing paperwork as the financial crisis produced a flood of foreclosures.

Home values have dropped 33 percent from their 2006 peak and nearly 11 million Americans now owe more than their homes are worth.