Foreclosure deal no panacea for housing market

The five largest U.S. banks have agreed to a $25-billion deal with government officials related to abusive foreclosure practices that will provide financial assistance to an estimated one million homeowners. But analysts say that while the deal reduces uncertainty facing the housing market, it's not a cure for the country's depressed real estate market.

"I don't view this as anything more than a small blip on the radar," Charles Ortel, Managing Director at Newport Value Partners, tells BNN. "If this accelerates the foreclosure process back to where it should be it's probably going to crimp demand and consumer spending."

Ortel says the foreclosure crisis -- where banks were accused of "robo-signing" on foreclosed properties and failing to document their ownership of homes -- gave the government a chance to take those responsible for the housing bubble to task.

"The public in America really deserves to understand who was responsible for this mess -- why didn't the regulators catch it, what was really going on?" he says. "There were all sorts of government officials and regulators who were asleep at the switch -- and not for a week, not for a year, not for one administration, but going all the way back to the community reinvestment act in 1977."

He says that because the details of the deal have yet to be released, it's impossible to tell if this will ensure a similar problem doesn't occur in the future.