(LOS ANGELES TIMES) — Federal and state officials on Thursday announced a landmark $26-billion agreement with the nation’s five largest mortgage servicers to settle investigations involving foreclosure abuses and try to stabilize the housing market.

The deal would give $17 billion in relief to current homeowners, mostly by reducing the amount of principal they owe on their mortgages.

An additional $5 billion would be paid in cash to California and more than 40 other states as restitution for foreclosure paperwork problems and other improprieties by the servicers in the foreclosure process. Officials said hundreds of thousands of homeowners would probably get $1,700 to $2,000 each under that part of the deal. About $1.5 billion of the $5 billion would be distributed directly to people whose homes were foreclosed on from 2008 through 2011.

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