Thursday January 31, 2013, 10:51 am
Feds Announce New Rules and Settlements on Mortgages

Posted by mahoma

It’s been a busy week for new developments affecting mortgage borrowers and homeowners who lost their homes to foreclosure. The Consumer Financial Protection Bureau (CFPB) announced new regulations on January 10 that, when implemented in 2014, will require banks to honestly characterize the full costs of their mortgage loans and lend only to borrowers that have proven that they can meet their loan payments, among other stipulations. According to CFPB head Richard Cordray, these policies are designed to keep borrowers safe from default and to keep the housing market stable. See Consumers Union’s press release about the policies, as well as a report from the Washington Post.

Earlier this week Fannie Mae reached an agreement with Bank of America over bad mortgages that led to record defaults. According to the terms of the settlement, Bank of America will buy approximately 30,000 of the risky loans it had sold to Fannie Mae, and provide additional payouts to it as well. Moreover, Bank of America has agreed to have other firms service many of its loans.

Finally, the Federal Reserve Board and the Office of the Comptroller of the Currency announced a settlement with ten home-loan servicers, including Bank of America, as part of an ongoing effort to compensate mortgage borrowers for wrongful foreclosure procedures conducted by major banks. Aurora, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo also participated in the agreement, which overhauls the Independent Foreclosure Review. Borrowers who lost their homes to foreclosure to these banks between 2009 and 2010 (not just those who applied for the Independent Foreclosure Review) will be eligible for compensation from the $3.3 billion fund. The settlement also requires the banks to set aside$5.2 billion in a variety of non-cash benefits to borrowers with outstanding mortgages that include granting loan modifications.

More announcements may come soon, as according to the OCC and Federal Reserve’s press release describing the settlement, the federal government is still negotiating with other participants in the Independent Foreclosure Review in the hopes that they will join the agreement as well. For more information on this settlement, see the Federal Reserve’s website, as well as ProPublica.

Thursday January 31, 2013, 11:04 am
Could they make it retroactive? How about going after these banks full steam ahead and damn the torpedoes?

Thursday January 31, 2013, 11:12 am

Too little and too late for millions that have lost their homes.

Thursday January 31, 2013, 1:17 pm
You cannot currently send a star to Michael because you have done so within the last week.
You cannot currently send a star to Kit because you have done so within the last week.
At least this should help prevent a repeat and we have Elizabeth Warren to thank that we now have the CFSB.

Friday February 1, 2013, 3:40 am
This is such scary stuff....

Friday February 1, 2013, 5:02 am
ty

Friday February 1, 2013, 7:13 am
You're welcome Ro

Friday February 1, 2013, 5:35 pm
Way too little and way to LATE. The BANKSTA/GANGTAS get off scot free! Elizabeth Warren and Hillary Clinton 2016 - boy would that be a great democratic duo.

Friday February 1, 2013, 6:21 pm
You cannot currently send a star to Aurea because you have done so within the last week.

Friday February 1, 2013, 10:47 pm
Finally they get around to making new regulations which would require banks to fully characterize the full costs of their mortgage loans and lend only to borrowers that have proven that they can meet their loan payments, among other stipulations. Why were these safeguards so overlooked before? Because fraud was committed by many of the high level bank officials without any sanctions and we know that none of them had to serve any time in prison. In fact the banks came out on top in this whole sordid mess while so many people lost their homes and everything they had worked for! Only a fraction of the people who lost their homes and so many lives also damaged by such a financial collapse will get any compensation at all- most unfortunately will not!

Saturday February 2, 2013, 6:40 pm
Its about time, but I agree with Kit B, too little, too late.

Indianapolis Mortgage Guy

Saturday February 2, 2013, 9:40 pm
Thanks J.L. A.

I agree with Kit, and I'll be interested in the results.

Sunday February 3, 2013, 9:12 am
You cannot currently send a star to Mary because you have done so within the last week.