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Wednesday, May 25, 2011

WSJ: State AGs Warn Banks of Suits if Foreclosure Settlement isn't Reached

by Calculated Risk on 5/25/2011 12:50:00 AM

From at the WSJ: Banks Face $17 Billion in Suits Over Foreclosures

State attorneys general told five of the nation's largest banks on Tuesday they face a potential liability of at least $17 billion in civil lawsuits if a settlement isn't reached to address improper foreclosure practices ... The figure doesn't cover additional billions of dollars in potential claims from federal agencies.
The initial number floated by the government was a $20 billion settlement. The banks suggested a $5 billion fund to provide transition assistance for those losing their homes in foreclosure. However the banks already provide transition assistance ("cash for keys") for borrowers who leave the keys and property in decent shape - so that wasn't much of a penalty. I guess this $17 billion is the new government number - so it appears the sides are still far apart.