There are a lot of good things about today’s $25 billion settlement between the five largest mortgage servicers, the Dept. of Justice and the attorneys general of 49 states. But in spite of the huge price tag on the deal — which could grow even larger if other lenders sign on — it’s only the beginning of cleaning up the aftermath of housing market collapse.
More than a year after several of the nation’s largest mortgage lenders temporarily suspended foreclosures after it was revealed that they had been using untrained, unqualified “robosigners” to process foreclosure documents, the U.S. Justice Dept. and the attorneys general of 49 states have announced a $25 billion settlement that will result in mortgage reductions to some homeowners.
Last night was the deadline for the attorneys general of each state to sign onto a massive settlement with the nation’s five largest mortgage lenders, and more than 40 of the states opted to join in the pot-sharing.
Tom was in danger of foreclosure and losing his home, so when he was approved for a mortgage modification program by Bank of America, he was relieved. As long as he made his new lower monthly payments on time for three months, he was golden. But one slip of the fingers on his phone’s keypad changed everything, and fast.