Reuters: Foreclosure Settlement: States, Banks Near Deal On Major Sticking Point

[flpoljunkie]

Foreclosure Settlement: States, Banks Near Deal On Major Sticking Point

In recent days, the state attorneys general agreed to release major banks from claims that they made legal errors when first originating the loans, such as approving loans for borrowers without verifying any income, according to two people familiar with the talks.

In exchange, banks would agree to refinance mortgages for borrowers who are current on their payments but owe more than their homes are currently worth, the sources said.

The deal is being negotiated between the states and several federal agencies on one side, and Bank of America Corp , JPMorgan Chase & Co, Wells Fargo, Citigroup and Ally Financial on the other.

It also could bolster the Obama administration's plan to further extend help to underwater borrowers whose loans are owned by Fannie Mae or Freddie Mac to refinance their mortgages.

Treasury Secretary Timothy Geithner said on Tuesday that he hopes the government will reveal the details of that plan in coming days.

The deal with the states, which would address bank-owned underwater mortgages, could complement the administration's plan.

more at link...

http://www.huffingtonpost.com/2011/10/19/foreclosure-settlement-states-banks_n_1019265.html

[xchrom]

1. unrec -- this deal sucks. nt

[FrenchieCat]

2. It doesn't suck if you are one of the 10.9 million with underwater mortages not currently

eligible to refi, and yet are still making their payments.

Perhaps that doesn't help you, but this deal doesn't suck for many.

in the article:
MILLIONS OF UNDERWATER MORTGAGES

The refinancing plan under consideration by the banks would be in addition to the outlines of the deal agreed to date, pushing the total settlement tab closer to $25 billion from a previous estimate of about $20 billion.

About 70 or 80 percent of that previous amount had been slated to settle federal claims and would be used by the banks to help troubled borrowers with a menu of options to include principal writedowns, cash for transition to rental housing and other forms of assistance.

It is unclear exactly how many homeowners could qualify for refinancing under the new element of the proposed deal.

Around 20 percent of all mortgages are bank-owned. Those loans which are underwater are generally not currently eligible for refinancing.

An estimated 22.5 percent of all residential properties with a mortgage -- around 10.9 million of them -- are underwater, according to data from CoreLogic.

[flpoljunkie]

4. Geither's deal with FHFA could be a bigger deal-since Fannie, Freddie own >50% of all mortgagesg

It also could bolster the Obama administration's plan to further extend help to underwater borrowers whose loans are owned by Fannie Mae or Freddie Mac to refinance their mortgages.

[FrenchieCat]

3. That was part of the problem with the first act passed to help homeowners.....

a lot of folks, including Republicans and the media attempted to
generate negative PR in reference to the assistance available,
and due to that, a whole lot of people didn't even try the get help,
because they believed the bad press about the programs, and ended up
losing their homes.

Hell, that's how the Tea Party came into being......as a protest
of not wanting to help out those facing foreclosure, as though that didn't affect
entire neighborhoods nationwide. :eyes:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x2048379


So just saying "this deal sucks" is not helpful......

[karynnj]

7. Excellent points - it astonishes me that people did not see that

letting a significant number of homes have foreclosures would be bad for their neighborhood. It harms the community in so many ways that aren't immediately obvious. Of course, it hurts the people made homeless, but it also hurts every one on the block - in terms of lower value to their own home and the eyesore or even danger of vacant homes. It also hurts the small businesses, which lose those customers. It lowers city tax revenues, which lowers what the city can provide.

[whatchamacallit]

5. Apparently all it takes to dismiss outright fraud these days is a potential silver lining

More ethical relativism from Team Obama.

[flpoljunkie]

6. It doesn't appear to release banks from lawsuits for the *'shitty deals' they foisted on investors--

including Fannie and Freddie. *Carl Levin's description of Fabrice Tourre emails describing some of the 'Frankenstein financial products' Goldman created.