The Bad News About the Foreclosure Deal

The $26 billion settlement between large banks and the states is a big deal, but it won't put the housing market's problems behind us.

Everybody seems relieved to have the negotiations behind them, but it's not over yet. Banks will get limited protection under the settlement, but future lawsuits are not off the table. That means more uncertainty and resources devoted to unwinding the mortgage mess.

In addition, the settlement will only affect a small slice of the U.S. housing market. It may clear out some of the problems, but homeowners can't expect a tranquil market just yet. In fact, foreclosures will most likely increase temporarily as a result of the agreement. That's bad news for anybody looking to sell in the near future.

While the foreclosure deal may put a dent in the housing market's problems, be prepared for a few more years of rough sledding -- this deal hasn't fixed everything.