US, banks seal $25bn mortgage settlement

[Letsbereal]

US, banks seal $25bn mortgage settlement
12 March 2012, (AFP)
http://www.france24.com/en/20120312-us-banks-seal-25bn-mortgage-settlement

The US government and five big banks sealed a $25 billion deal Monday aimed at addressing widespread mortgage abuses and getting the depressed housing market restarted.

The Justice Department said the deal, first announced last month, to force banks to ease terms for troubled home-loan borrowers and compensate those who suffered administrative abuse in foreclosures, had been finalized via court filings.

The judgment requires the five banks -- Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial -- to commit $20 billion to various forms of relief for home-loan borrowers, including writedowns of principal, refinancings, and other assistance for homeowners unable to fully service their mortgages.

They also have to pay a group of 49 states $5 billion in penalties and contributions to a fund to provide cash payments to former borrowers whose homes were seized unfairly between 2008 and 2011, the worst years of the housing crisis.

The payout for Bank of America, which took over Countrywide, the giant mortgage servicer blamed for widespread abuses, is $11.8 billion.

The hit to Wells Fargo is $5.4 billion; to JPMorgan Chase $5.3 billion, to Citigroup $2.2 billion; and Ally, $310 million.

The Department of Justice said the court filings also set new standards for the banks that "will prevent foreclosure abuses of the past, such as robo-signing, improper documentation and lost paperwork, and create new consumer protections."

Analysts said that the size of the settlement is a drop in the bucket compared to the hundreds of billions of dollars in homeowners' lost equity in the crash, but that it would help the banks get past some of their legal troubles.

But the Justice Department said the new agreement does not protect the banks from criminal charges related to the same issues addressed in the civil case filed by the states and federal government.

[2Revolutions]

Rage grows over mortgage deal

http://money.cnn.com/2012/03/13/real_estate/mortgage-settlement/index.htm?hpt=hp_t2

NEW YORK (CNNMoney) -- As more details emerge about the massive $26 billion foreclosure settlement between the five biggest mortgage lenders and the states' attorneys general, a growing number of borrowers are realizing that the deal will do little, if anything, to help them out.

However, that's only a fraction of the 11 million homeowners who are currently underwater on their homes, according to CoreLogic. And it's also a mere sliver of the 3.5 million people who lost their homes to foreclosure over the past four years.

Borrowers who have a mortgage held by Fannie Mae (FNMA, Fortune 500) or Freddie Mac (FRE) -- roughly half the market -- are out of luck. Loans insured by the Federal Housing Administration are also ineligible.

[2Revolutions]

Look what was sneaked in under the radar

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Judge Signs Off on Foreclosure Settlement

http://online.wsj.com/article/SB10001424052702303302504577326263989736528.html#articleTabs%3Darticle

A federal judge signed off on the $25-billion foreclosure settlement between banks, federal agencies, and the state attorneys general from 49 states and the District of Columbia on Wednesday.

The signed agreement was entered in court and made public on Thursday. Bond investors had grumbled over some of the deal's terms, with one investor trade group hinting at a potential legal challenge. That group, the Association of Mortgage Investors, didn't have an immediate comment on Thursday. It hadn't filed any challenge to the deal as of Thursday.

[Kilika]

Who didn't know government would do this? It's a deal between criminals. Clearly those institutions are guilty of fraudulent mortages, and they just walked.

And as a result, how many homeowners won't have recourse directly with their bank to challenge the bank's claim of owning the note in the first place? I just knew this would happen.

The biggest thing in this that is overlooked, I suspect on purpose, is that those banks cannot foreclose on notes they never owned in the first place. So their need is to dumped those notes as soon as possible, under the false impression it's a valid note when it isn't. But if the deal is passed on, and "made legal" (I'd call it laundering paper), then it's off their books as far as they would be concerned. Pay the feds their cut, and it's back to business.

I should expect nothing less from the world!