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About That $25 Billion Robo-Signing Settlement


Business  (tags: lies, law, money, politics, usa, society, investments, investors, investing, government, finance, ethics, foreclosures, economy, dishonesty, corporate, corruption, debt, business, consumers, americans, abuse )

JL
- 639 days ago - businessweek.com
60 percent of the first-lien principal Bank of America has agreed to reduce is from loans that were bundled into mortgage-backed bonds sold to hedge funds, pension funds, and other institutional investors



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JL A. (275)
Sunday November 18, 2012, 7:52 am

Bloomberg Businessweek
Markets & Finance
About That $25 Billion Robo-Signing Settlement
By Karen Weise on November 15, 2012

Bank of America (BAC) is touting some good news: It’s completed or approved $15.8 billion in relief for 164,000 homeowners as part of the national mortgage settlement signed in February. BofA says those figures include approvals to cut the mortgage principal owed by 30,000 homeowners. It says it’s on track to fulfill its obligations in the first year of the program, rather than the three years banks have to comply.

The settlement grew out of the robo-signing scandal that revealed shoddy procedures at the mortgage-servicing operations of the U.S.’s largest banks. Yet the banks aren’t shouldering the full burden of the penalties. That’s because many of the mortgages on which they are reducing principal are owned by investors, not the banks. The Financial Times reports that 60 percent of the first-lien principal Bank of America has agreed to reduce is from loans that were bundled into mortgage-backed bonds sold to hedge funds, pension funds, and other institutional investors. The settlement allows the banks to reduce principal in loans they service but do not own.

Critics have raised questions about other parts of the settlement. Borrowers who think they lost their home through a wrongful foreclosure are entitled to a so-called Independent Foreclosure Review. The investigative newsroom ProPublica reports that the reviews have been far from independent, with the banks exerting undue influence over the review process.

Another problem: States received money to help homeowners and prevent foreclosures, but many have diverted their share of the cash to plug holes in general funds.

The best news for homeowners comes from the strengthening economy. Today the Mortgage Bankers Association reported a drop in the number of seriously delinquent borrowers—that is, those at least 90 days behind on payments or in foreclosure. Just over 7 percent of borrowers are seriously delinquent, the lowest level since 2008. According to a post on Bloomberg this morning, “more borrowers were able to make their monthly payments as [the] unemployment rate dropped to 7.8 percent in September, the lowest since January 2009.” An improving job market may be the best medicine for the housing crisis.


 

Sue H. (7)
Sunday November 18, 2012, 8:49 am
I'd still like to know why the scum vultures are not in jail.!
 

JL A. (275)
Sunday November 18, 2012, 9:12 am
You cannot currently send a star to Sue because you have done so within the last week.
 

Roger Garin-michaud (61)
Sunday November 18, 2012, 12:15 pm
noted, thanks !
 

JL A. (275)
Sunday November 18, 2012, 12:23 pm
You are welcome Roget!
 

Robert S. (115)
Sunday November 18, 2012, 1:27 pm
http://www.propublica.org/article/doubts-about-independent-foreclosure-review-spread
 

JL A. (275)
Sunday November 18, 2012, 1:39 pm
Thanks for providing the url to an article that provides specifics and details of the concerns about the independent foreclosure review component of the program Robert--I encourage all reading to get that additional information.
 

Micheael Kirkbym (85)
Monday November 19, 2012, 6:35 am
Anything to actually avoid addressing and honoring the promise to fix the problem. Vulture corporatism at its ugliest.
 

JL A. (275)
Monday November 19, 2012, 7:36 am
You cannot currently send a star to Michael because you have done so within the last week.
 

Giana Peranio-Paz (379)
Tuesday November 20, 2012, 2:11 am
Thanks J.L. noted.
 

JL A. (275)
Tuesday November 20, 2012, 9:58 am
You are welcome Giana.
 

Tom Sullivan (99)
Tuesday November 20, 2012, 12:46 pm
They won't go to prison, because our so called reps want there money
 

JL A. (275)
Tuesday November 20, 2012, 12:54 pm
You cannot currently send a star to Tom because you have done so within the last week.
 

Past Member (0)
Tuesday November 20, 2012, 1:26 pm
Let's understand that the housing bubble burst as much by the banksters bundling garbage with good loans and then gambling with that money on futures, hedge funds, etc., as it was by people who couldn't afford their loans. It was the banksters who gambled and won, because 'the house always wins'. And, they also won a $13 trillion dollar handout of our tax dollars.
Now, the cheap bastards won't even use their measly $25 billion to really help the people who really suffered.
 

JL A. (275)
Tuesday November 20, 2012, 1:36 pm
Thank you Robert for reminding everyone of the relevant history on this issue and why the latest is also ghastly!
 

Lois Jordan (54)
Tuesday November 20, 2012, 2:53 pm
Thanks for the article, J.L. What I don't understand is: "States received money to help homeowners and prevent foreclosures, but many have diverted their share of the cash to plug holes in general funds." How can they legally do this? If the money was given for this specific reason, isn't it illegal to use it for anything else? That isn't the states' money to do with as they please.
 

JL A. (275)
Tuesday November 20, 2012, 3:19 pm
Those are indeed questions needing an answer--and the feds (or federal auditors) might require it be paid back.You cannot currently send a star to Lois because you have done so within the last week.
 

june t. (65)
Tuesday November 20, 2012, 10:57 pm
thanks for the article
 

Kathleen R. (138)
Wednesday November 21, 2012, 5:57 am
noted & read
 
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