Foreclosure Settlement Falls Short, Still Worth the Wait: View

In any out-of-court settlement for alleged wrongdoing, the test of whether prosecutors got a good deal rests on the answers to three questions: Does it hold the miscreants accountable? Does it make victims whole? And does it prevent similar misconduct in the future?

Thursday’s $25 billion agreement by five banks to end a 16-month investigation of abusive foreclosure practices fails on the first two counts. And we won’t know for some time whether it is successful on the third. Nonetheless, the deal is in the country’s interest because it clarifies the liabilities of banks that filed bogus court documents to speed up repossessions. That could clear the clogged foreclosure process and, more importantly, help bring a moribund real-estate market back to life.