On Thursday, a deal of $25 billion has been approved by the government of America. The deal has been signed between the mortgage lenders. The deal was approved with the pursuit of providing relief to victims of foreclosure abuses.

However, the consumer advocates are of the view that the deal might not help many people. As per the deal, the loans of those American who owe more than one home loans would be reduced. Those who became the victim of foreclosure would be sent checks.

Experts have not yet pointed out as to how the deal would prove beneficial for the homeowners. But, it is believed that about 1 million people would be helped through the deal. Richard Green from the University of Southern California’s Lusk Center for Real Estate said, “The total number of dollars is still small compared to the value of the mortgages that are underwater”.

As many as 49 states have agreed to be a part of the deal. Moreover, discussions are being conducted over as to how other states could be helped. It has been informed that large chunk of money from $25 billion would be sent to California and Florida, as they were severely hit by foreclosures.

It is estimated 75% of the money would be sent to the two states. It is hoped that the settlement between the government and the mortgage lenders would help in ending the financial saga. While supporting the settlement, US President Barack Obama said that the deal would speed up the recovery of the nation from the severe financial crisis.

He is also hopeful that with the help of settlement, the mortgage industry would flourish again. However, the critics are of the view that the deal would help only handful of people.