The recently announced $25 billion mortgage relief settlement is only a first step toward just resolution to the housing crisis.

The multi-state settlement between big banks and 49 states’  attorneys general, comes after more than a year of negotiations which stemmed from evidence that banks "robo-signed" thousands of foreclosure documents and failed to allow mortgage modifications for underwater homeowners.

In an interview with PBS Newshour, PICO Policy Director Gordon Whitman said the settlement is “a drop in the bucket compared to what we need to get to. We believe that we will over the next two to three years, one to two years, get to the point where we have that level of $300 billion in principal reduction.”

The settlement includes an estimated $10 billion to$20 billion for principal reduction - a fraction of the $700 billion in total negative equity.  The reported $1,800 restitution payment for those who already lost their homes does not compare to the wealth stripped from so many families. It falls far short of providing real justice for homeowners and American families. 

In Florida, one of the states hit hardest by the housing crisis, PICO leaders say there will be even less relief for displaced and underwater homeowners. 

 In an interview with the Orlando Sentinel, the Rev. Errol G. Thompson, chairman of PICO United Florida  said, "For over a year, clergy and homeowners in Florida have been calling upon our Attorney General Pam Bondi to stand up to the banks on behalf of Florida families. We are disappointed that she did not aggressively advocate for Florida homeowners.”

Despite its flaws, the settlement is stronger than it would have otherwise been because of grassroots efforts of PICO federations across the country and the courageous stance of attorneys general from California, New York, Nevada, Delaware, and Massachusetts, who fought hard to bring more relief to homeowners and make sure that any settlement does not allow the banks to avoid accountability for fraudulent activity not yet investigated.

What happens next is critical. This is the President's chance to show he is a champion for the 99%. PICO clergy and lay leaders on the front lines of the housing crisis, are working to build momentum towards broad-scale relief for homeowners. President Obama has publicly acknowledged that allowing underwater homeowners to get out from under the debt they are living with is key to rebooting the economy. 

PICO faith leaders and the New Bottom Line plan to continue to press President Obama and his mortgage fraud task force to ensure that the settlement is just the first step towards holding the banks accountable. Moving forward:

• President Obama must ensure that his new mortgage fraud task force goes the distance this year, with the resources and leadership it needs to conduct a robust and far-reaching investigation that ultimately leads to at least $300 billion in reduced principal on underwater mortgages and $50 billion in restitution for affected homeowners;

• The President should replace the leadership at the Federal Housing Finance Agency, which has obstructed efforts to reduce principal that would save the taxpayers tens of millions of dollars.

• There must be a strong, robust enforcement mechanism in the deal announced today, with swift and severe consequences for banks that fail to live up to the terms of the settlement;

• State attorneys general must continue investigating – together with the federal task force – Wall Street’s role in causing the housing crisis and ensure that the banks that caused the crisis right their wrongs.