Gretchen Morgenson: Foreclosure Deal Not Enough To Restore Trust In Loan Servicers

New York Times:

Five big banks finally reached a deal with government authorities last week over dubious mortgage practices and foreclosure abuses.

After months of talks, Ally Financial, Bank of America, Citibank, JPMorgan Chase and Wells Fargo agreed to pay a total of $5 billion in cash to try to remedy this fiasco. They will also help homeowners who are underwater on their mortgages by reducing the principal on their loans by a combined $17 billion over the next three years.

Read the whole story: New York Times

Comments

[Lauren D]

04:52 PM on 02/14/2012

yes the banks are winning. check this story out. Mon, 29 Aug 2011 15:28:00 -0500


By Stacy Whelchel
In a strange twist of events, a retired Florida couple was recently featured in a news story for being threatened with the sale of their home after paying their mortgage a week early.

The background: The couple had faced financial difficulties due to the husband's terminal illness. They asked their bank for a loan modification. The request was granted with the requirement that the couple officially default on their monthly loan payment, which they did.

Afterwards, their monthly payment amount dropped; however, the couple was removed from the plan when a January payment was made in late December. Foreclosure proceedings were initiated even after the bank was contacted for an explanation.

The couple has now retained a lawyer to represent their interests in the ongoing case.
With a LegalShield membership, legal assistance would have been available for this couple from the first moments they questioned their legal rights.

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[Jen Celli]

01:35 PM on 02/13/2012

Anyone that knows anything about the mortgage lending business knows this whole settlement was strictly for show. If it actually helps anyone, it will be the banks that pad their bottom line with exorbitant fees and charges on the "modifications" they'll underwrite. You can pretty well bet that they will find few if any improper foreclosures. The borrowers were in default and even if the paperwork smells like day old fish, it won't ever be disclosed. End result: Americans/Zip and Banks/3:3

[Diasamax]

11:41 AM on 02/13/2012

Why are they being allowed a three year grace period to pay back such a pathetic amount to the people owed? In consideration of the monies made by not wanting to work with the people to begin with, it is another slap in their faces. And reduction of the principal is what should have been done in the first place. They knew the market was inflated to begin with.

[Opinionated Lady]

11:18 AM on 02/13/2012

Who pays for the "consultants" Smith will hire? My guess is the victims of this mess. Mainly, the taxpayers and homeowners. Banks will be required to file quarterly reports with Smith, who will then review these reports. Big Deal. And, $2000 for disrupted lives, shame and grief of the former homeowners? Bigger deal.

See what FireDogLake is saying about this deal, which provides little justice for those who were charged unreasonable fees to ensure their failure, who were victims of document fraud, and who were disposessed of their homes unfairly.

[IndyFem]

10:21 AM on 02/13/2012

and to think that Obama was so Proud of this accomplishment...

[Collapsing House Price]

11:00 AM on 02/13/2012

You realtors are unindicted co-conspirators..... but not for long.

[feelingdisposable]

09:26 AM on 02/13/2012

Why should anyone put any trust in "the system"? As soon as the settlement was announced, governor's across the country started claiming the mortgage money as their's to do with as they pleased - like plug their budget holes. Once again, the American public is getting royally screwed without even a hope of a reach-around.