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Tuesday, May 10, 2011

Report: $5 Billion Mortgage Servicer Settlement being Discussed

by Calculated Risk on 5/10/2011 08:46:00 PM

So much for the $20 billion settlement, and it still isn't clear what would happen with the money ...

From the WSJ: Banks Float $5 Billion Deal to End Foreclosure Probe

The nation's biggest banks are willing to pay as much as $5 billion to settle claims by federal and state officials of improper mortgage-servicing practices, according to people familiar with the situation.

Such an offer is considerably less than the amounts sought by state and federal officials, some of whom are asking for more than $20 billion in penalties.
The banks intend to propose that as much as $5 billion be used to compensate any borrowers previously wronged in the foreclosure process and provide transition assistance for borrowers who are ousted from their homes, according to people familiar with the matter. One idea is that foreclosed borrowers could receive several months of free rent once they find new housing, one of these people said.
Didn't the banks say no one was "wronged" in the foreclosure process?

• NFIB: Small Business Optimism Index declined in April
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Real CoreLogic House Price Index, and Price-to-Rent Ratio, back to 1999 Levels