The $25 billion foreclosure settlement with five of the nation’s biggest banks, announced this morning by federal and state officials, is a “step in addressing the housing and foreclosure crisis that plagues our country,” says AFL-CIO President Richard Trumka.

The banks broke the law by railroading homeowners through the foreclosure process. Today’s settlement provides compensation for foreclosure victims without requiring individuals to waive their legal claims. While banks must be made to pay more to help homeowners, the settlement includes needed principal write-downs so homeowners can stay in their homes.

The deal with the five banks settles potential charges against the banks for fraudulent practices, including improper foreclosures by “robo-signing” foreclosure documents. U.S. Attorney General Eric Holder says the settlement moves toward “righting the wrongs that led to our nation’s housing-market collapse and economic crisis.”

The five big banks are Ally/GMAC, Bank of America, Citibank, JPMorgan Chase and Wells Fargo. Forty-nine states and the federal government have signed on to the settlement. Oklahoma is the lone holdout state.

Trumka says federal and state officials now need to continue their investigations into the “full range of illegal bank activities that caused this crisis so we can hold fraudsters accountable for their actions.”

We urge President Obama to provide the federal investigative task force with the resources necessary to address the $750 billion in negative home equity that is the result of illegal conduct by banks.  The 99 percent demand a fair economy and a judicial system that holds the rich and powerful accountable for their illegal behavior.

California was one of the hardest states by the housing crisis and the banks’ actions. Art Pulaski, executive secretary-Treasurer of the California Labor Federation says the settlement “is a critical first step in holding banks accountable for cratering our state’s economy.”

He also offered praise for state Attorney  General Kamal Harris who held out against earlier proposals that we far more lenient on the banks.

In the face of enormous pressure from the banks to let them off with a slap on the wrist, Harris stood firm, ensuring that California families received a measure of justice for the devastation the banks wrought.

Click here for details on the settlement.