Why Millions Won’t Get Help From Big Mortgage Settlement

Why Millions Won’t Get Help From Big Mortgage Settlement

by Cora Currier ProPublica

Answers to homeowners’ questions about the Independent Foreclosure Review.The administration’s website for the foreclosure prevention program. Provides an FAQ, homeowner examples, and other tools to see whether you might qualify for the program.A list of HUD-approved housing counseling agencies nationwide.Tips for homeowners from the Federal Trade Commission.These rules lay out how mortgage servicers are supposed to conduct the program.A finance and economics blog that provides news and metrics on the state of the housing market.

The Obama administration is billing today’s $25 billion agreement between most states and five banks that engaged in flawed or deceptive practices as a big win for struggling homeowners.

Most of the money in the settlement isn’t a penalty, or a fine levied on the banks. Instead, the biggest slice of the settlement will be money banks put toward principal reduction — reducing the amount owed by struggling or underwater borrowers. (Banks will also put smaller amounts toward refinancing and other ways of helping people get back in control of spiraling debt.)

Getting a break on their mortgages could help the millions of homeowners who owe more on their home than it is worth. But many of them won’t qualify — thanks to government-owned Fannie Mae and Freddie Mac.

The two mortgage companies, who were bailed out by the government in 2008, were described by former Obama economic advisor Jared Bernstein as “the boulder” in the way of principal reduction. Their federal regulator, the Federal Housing Finance Agency, is tasked with maximizing profits from the companies — and thus minimizing taxpayer losses. The head of the agency, Edward DeMarco, argues that allowing principal reductions would result in a big loss for Fannie and Freddie and ultimately taxpayers.

The two companies aren’t directly part of the settlement. They don’t service mortgages, or deal directly with borrowers. But Fannie and Freddie do guarantee or own roughly half of the mortgages in the U.S. They also hold more than 3 million of the nation’s nearly 11 million underwater mortgages. Since Fannie and Freddie are backing the loans — and are the ones who will take a loss if the mortgage isn’t paid back in full — they often have a veto on whether homeowners get a break.

Even if Bank of America, for example, services your mortgage, you would not be eligible for principal reduction if Freddie or Fannie back it.

Principal reduction is being pushed heavily by the Obama administration as a way to lower the rate of foreclosures. The administration recently tried to encourage Fannie and Freddie by offering to triple incentives for principal reduction. So far, the companies and their federal overseer, DeMarco, have declined to do so. An FHFA spokesperson said that the agency is “not a party to the agreement. We await a copy of the agreement to determine its implications.”

Lowering the amount of money owed on a loan would result in at least short-term losses for Fannie and Freddie, as well as to any other investors in mortgages that are reduced. But many economists and analysts argue that Fannie and Freddie would ultimately benefit since such moves could help restore the health of the housing market as a whole.

The reluctance by Fannie, Freddie and others to take on principal reduction is partly why the administration’s mortgage modification programs have been so ineffective.

The settlement does have potential benefits for future borrowers, including new protections and disclosures to prevent what Attorney General Eric Holder called “abusive practices” by the mortgage industry.

A small portion of the overall settlement — about $5 billion — will amount to penalties for past abuses by the banks. Some of it will go to state governments that were afflicted by banks’ shoddy practices, and some of it will go directly to about 750,000 homeowners who were foreclosed upon. If you lost your home, you could get up to $2,000.

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4closureFraud.org

Comments
9 Responses to “Why Millions Won’t Get Help From Big Mortgage Settlement”
  1. Hannah says:

    Justice and accountability would be nice. Are there any non-crooked judges?

  2. MARGETTA LANGLOIS PRO.SE says:

    NEVER MIND TAKING “PENNIES” FROM THE “CROOKED” GOVERNMENT FOR OUR HOMES THEY TOOK BY “FRAUD”

    THESE “DIRTY” JUDGES ARE THE ONES “CONDONING” THESE “ILLEGAL” FORECLOSURES…

    “NULL” & “VOID” YOUR FORECLOSURE, (ILLEGAL) “SALE, QUIT CLAIM DEED TO NEW OWNERS

    IF THE CO. NEVER EXISTED IT’S “FRAUD”…

    CALL YOUR CAPITAL (O.F.R. “OFFICE OF FINANCIAL REGULATIONS” & GET A “GOLD” SEAL CERTIFICATE IF THE CO. (“ENTITY” WAS NEVER LIC. IN YOUR STATE ……

    .REMEMBER THE COURT SAYS IT’S NOT “FRAUD” WHAT THEY DID TO US…

    JUDGE’S HAVE “NO” JURISDICTION” TO TAKE :”YOUR” HOME

    ON THE “NOTICE TO “NULL” & “VOID” WRITE

    YOU’RE THE “PREVIOUS” /’OWNER” & STILL “LEGAL” OWNER

    PLACE THE NOTARIZED “NULL”& “VOID” IN DEED RECORDINGS IN PUBLIC RECORDS AGAINST DEED & TITLE

    & WRITE THIS CAN NEVER BE “REMOVED,” “SOLD” TRANSFERRED &/ OR “QUIT CLAIM DEEDED.”

    DUE TO JUDGES AIDED & ABETTED FRAUD, FORGERIES & “PERJURY”

    I WROTE THE 3 JUDGES NAMES THE 5 FRAUD CO.’S & THE 8 + ATTY.’S NAMES

    LET EVERYONE KBOW HOW DIRTY THE COURTS & SYSTEM REALLY IS

    JUDGES “OBSTRUCTED” JUSTICE & CREATED A “GROSS-MISCARRIAGE OF JUSTICE”…

    ESPECIALLY THESE NEW OWNERS ARE ONLY BUYING OUR HOMES TO “SELL” & MAKE BIG MONIES OFF OUR HOMES

    REMEMBER YOU CAN ALWAYS “RE-OPEN” A CASE BY “DATE OF DISCOVERY” (“NEW” EVIDENCE)…

    FIGHT FOR YOUR HOME BACK IT’S “BULLSHIT” “NO’ TICKEY (“NO” PAPERWORK) “NO” HOME/ NO “FORECLOSURE” ..

    THESE JUDGE’S ARE GETTING “FATTER” & THEIR POCKETS “DEEPER” COME ON THEY’RE NOT TAKING OUR HOMES FOR FREE

    JUDGE’S ARE “AIDING” & “ABBETTING” “FRAUD,” “FORGERIES,” & “PERJURY” EVEN W/ ALL THE “EVIDENCE” JUDGE’S DON’T CARE…

    HOLD THEM ACCOUNTABLE FOR “CRIMINAL” INJUSTICE & “JAIL” QUITE A FEW &

    THEY’LL THINK TWICE ABOUT “SCREWING” THE “POOR” “PRO.SE’ PEOPLE…..WHO CAN’T AFFORD AN ATTY. ON A “CALL-IN” HEARING WHO’S REPRESENTING MINNIE MO– USE NO ONE SHOWS UP I HAD 13 HEARINGS ALL W/ A “PURPLE ELEPHANT” 3 1/2 YRS.

    I FOUND OUT THE “5” “FRAUD” COMPANIES NEVER EXISTED, “NO” ASSIGNMENT OF MORTGAGES
    NO TRANSFERS…

    JUDGES KNOW THESE CO.’S ARE “FRAUD” WE’RE SUPPOSE TO FAACE OUR ACC– USERS. .

    I WAS NEVER SERVED IN 3 1/2 YRS.

    ALL CAUGHT ON “TRANSCRIPTS” THE “2 “DIRTY” JUDGES MILLS & SHAFER W/
    “MY” COURT REPORTER I NEVER GO INTO COURT W/ OUT MY “GIRLS” !!!

    CATCH THESE JUDGES ON TAPE……PUT THEM IN “J-A-I-L” WE “PRO.SE’ ” ARE TOTLLY “IGNORED”,,,,,,

    • lvent says:

      The judges are not above the law either and will be held to account for turning a blind eye to this massive fraud….By the Judges alllowing the theft of millions of people homes and businesses proves complicity, criminal liability and ABSOLUTE TREASON….. The sheer arrogance of the bank attorneys and the judges I COULD CARE LESS ATTITUDE toward their fellow Americans losing it all is startling…It truly has to be seen first hand to be believed….The failure of the Judges to see that none of this is right…that the sheer volume of fraudclosure complaints they are presented with each day should not only have alarmed them long ago….but should have caused them to seriously question what is really occurring in their courtrooms and in courtrooms across America…and therefore their country…..they are witnessing the THEFT OF AMERICA…..AND THE JUDGES ARE AIDING AND ABETTING THE CRIME….! To witness what is going on inside these courtrooms between the bank attorneys and the judges reeks not only of a MASSIVE CONSPIRACY….but …TREASON….The attorneys wont get involved in the fight to clear title for homeowners because they know the judges are CORRUPT as their fraudclosure dockets are long…The attorneys helping homeowners by establishing an insolvent debt are not helping homeowners, they are aiding and abetting a crime equal to, or possibly worse than what the Judges are doing..The attorneys are setting more Americans up to fail and lose their home or business without legal recourse when the next manufactured crisis hits or these people lose their income due to the massive insolvent debt of these crooks and the fascist monetary policies of the UNCONSTITUTIONAL. and ILLEGAL FEDERAL RESERVE BANK. I pity all of these traitors when the people find out the truth about this Moneyed elite Hitler Plan to steal the wealth of the people, our property, our National Sovereignty…therefore our FREEDOM..ALL UNDER THE GUISE OF MONEY LENT…WHEN THE TRUTH IS NONE OF THESE FED OWNED INSTITUTIONS LEND ANY OF THEIR OWN MONEY..THE U.S. TREASURY LENT THEM THE PEOPLES MONEY….AND THESE CROOKS GAMBLED ON IT EXPONENTIALLY…AND GOT MASSIVELY RICH…THEIR DEBT IS MASSIVE..A QUADRILLION DOLLARS IN DRRIVATIVES FRAUD..IT IS ALL HIDDEN IN THEIR SHADOW BANK…AND IS UNSUSTAINABLE…AND CAN NEVER BE REPAID….ALL TRAITORS TO AMERICA WILL BE REVEALED AND HELD ACCOUNTABLE BY THE AMERICAN PEOPLE! ! OCCUPY!!!

      • lvent says:

        their underground rat holes await them… and they should all know…there is a paradigm shift coming when the people wake up..and there is going to be an earthquake of FURY soo massive that they better all hope they are crushed under the weight of it…because when and if these traitors come out…the people will be waiting…armed to the teeth and pissed off beyond belief. The price they will all pay for this will far outweigh any monetary wealth they will attain by screwing mankind by committing massive fraud and treason against their own country and their own people…! OCCUPY… !

  3. Carlos Dehesa says:

    When I bought my house in 1992 was worth $ 290,000.00

    I have paid to this date $ 512,000.00 in bank interest

    I currently owe $ 620,000.00 to be paid in 30 years

    The current value of my house is $ 315,000.00

    Something must be terribly wrong in the way banks lend money.

  4. GMAC/Ally sold my paper to fannie just prior to the fraudclosure. Bet that this will happen in every case from now on. As I see it, less than 1/10th of one percent of all foreclosed homeowners will see anything from this agreement. Has anyone even seen the agreement itself? What right does my State AG have to sign my rights away?

  5. readdocs says:

    Fannie and Freddie have been part of the problem from the beginning. They are not supposed to be a for
    profit company, yet they continue to line their own pockets.
    What is not being addressed is the fraudulent appraisals and valuations of home sold above their true value..

  6. marilyn lane says:

    My feelings are that the Title Insurers are behind this massive fraudulent settlement
    so that they get themselves our of their responsibility of indemnifying

    We must continue to fight .

  7. Jason Werner says:

    Good, we don’t want their help – we demand justice, not help.

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