NY Times | Mortgage Settlement Leaves Much to Be Desired

The Deal Is Done, but Hold the Applause

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.

Borrowers who qualify will get $3 billion in refinancing arrangements. Those who were improperly foreclosed on will get a combined $1.5 billion. That probably nets out to less than $2,000 a person.

The banks crowed that this settlement would help the economy and the reputation of the mortgage industry. Michael J. Heid, president of Wells Fargo Home Mortgage, characterized the deal as “a very important step toward restoring confidence in mortgage servicing and stability in the housing market.”

But it’s hard to imagine that this one settlement will be enough to restore trust in loan servicers. Given what we know about their questionable practices — how they larded improper fees on struggling homeowners, for example, and forced people to buy home insurance at three times market rates — restoring confidence in these firms will take some doing.

There’s no doubt that the banks are happy with this deal. You would be, too, if your bill for lying to courts and end-running the law came to less than $2,000 per loan file.

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2 Responses to “NY Times | Mortgage Settlement Leaves Much to Be Desired”
  1. Ron Moss says:

    I woulsd say give it some time But five year statute of limitations are nearly up then it won’t mattewr much.

  2. PJ says:

    Here again, in reference to North Carolina – They did nothing to help resolve my fraud case against Mortgage Network, Inc. of Cornelius NC and Chase Bank, Remax Realty, C. J. Welsh Construction, closing attorneys, brokers, City and County inspectors who ALL played a role in violating my consumer rights once initial and several subsequent complaints were filed in their offices. They stood by and did nothing (and they stole my money too) then and I doubt very seriously if they will do anything now against the banks et al. They are all in bed together. The administration needs to be held accountable for FISCAL responsibility — That my friends is a major deficiency and ignorance is no excuse. The government needs to hire people who have fiscal expertise to govern/management the money (IN PLACE EVEN BEFORE THE DEAL WAS CUT) that is being thown to the wind as far as I know. The old saying is true – It is an insane person who keeps doing the same thing, but expects different results. Fiscal management is badly needed so that these folk IN CHARGE who are lurking in the dark and not really, WHOLE-HEARTEDLY standing up for the people will be bound to come from out of the shadows and be exposed for the low lying, sly devils they are – looking, lurking, and waiting for the opportunity to line their own pockets while the rest us continue to suffer with uncertainty and maybe gain nothing all over again — Heaven help us! That’s the game that’s being played in the name of “settlement” and not justice.
    Question NC Officials: Will the settlement make sure that these people who were allowed to swindle me out of my money for years be brought to justice and made to pay it back after all these years of complaining? What are you going to do?

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