Mortgage settlement leaves most homeowners to fend for themselves

[Snake Alchemist]

The landmark $25 billion settlement reached by the federal government, 49 states and the nation's five biggest banks will provide long-overdue relief for hundreds of thousands of homeowners who have been struggling to navigate the mortgage mess created by lenders.

The wider impact for most homeowners, along with the housing market and economy, will be much more limited.

“You’re hardly skimming the surface,” said Paul Dales, a housing economist with Capital Economics. “It could help some people a lot, individually. But in terms of the big-picture, overall economy and housing market, it’s really just a drop in the ocean of the problem.”

The settlement takes a multipronged approach to try to unravel the aftermath of a housing market collapse that resulted in more than seven million foreclosures, created a legal morass for lenders and left a red tape nightmare for millions struggling to hang onto their homes.

Some of those who lost their homes may be eligible for a small cash payment, while others who are struggling to hang on may see their monthly payments lowered substantially through reductions in interest rates or their principal balance. So if you’re one of the lucky homeowners reached by the program, the impact could be significant.


http://bottomline.msnbc.msn.com/_news/2012/02/09/10365356-mortgage-settlement-leaves-most-homeowners-to-fend-for-themselves#.TzRRAcOVS6c.email

Anyone surprised?

[rfranklin]

1. As I have noted elsewhere...this is a drop in the bucket compared to banker compensation...

Big Bank Bonus Facts: 2011

Seven big banks – Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, US Bank, and Wells Fargo – are set to dole out year-end bonuses in the coming weeks. The banks do not release data on compensation until early next year, but it is possible to estimate the size of this year’s compensation pool based on data from the first three quarters of 2011 (note that compensation pools include salaries, benefits, and bonuses).

Press reports have suggested that Wall Street bankers will face a pay cut this year, but based on figures from the third quarter, compensation pools at the big banks are on track to be slightly larger than last year’s record breaking number: a combined $156 billion in total compensation.
http://www.newbottomline.com/report_big_bank_bonuses_in_2011

[customerserviceguy]

2. So, what's the solution?

Having government legislate house prices?

A bubble got built with the help of hot air from tax policy that favored buying real estate over most other investments, and it finally did what all bubbles do, it popped. There were winners including people who sold homes when the market was hot, and all the folks in the banking/real estate industry who made money while the sun shined. Of course, every popping bubble or collapsing pyramid has losers, the last suckers to get in.

Only an orderly procession of the processes of self-correction will fix this.

[banned from Kos]

3. Too much reality. All foreclosures were the banks fault. No one ever got behind

on their mortgage payment. Then the mean banker swooped in and defrauded the homeowner out of their home.

Seriously, 750,000 people get $2000 payments whether they were robo-signed or not while many others get write-downs before any robo-sig will take place.

There is no way to be fair about this mess.

[2pooped2pop]

4. but they tanked the entire economy

so I can't sell my house even though I have 15 years equity. They used to beg us to take a new mortgage. Shit happened and our 900 month payments became too much. Now, they won't even talk to us about refinancing. We really only wanted them to take our mortgage and expand it back out to thirty year loan, making the payments lower for us and the payoff bigger for them.

But they plan to collect because I faulted. Then they will come in and sell my house to themselves at pennies on the dollar. Then they will sue me for the balance of the loan that the sale did not cover. That is after they hold it up for a year or so to make my amount owed larger, charge me for all kinds of shit in between, etc.
It was plain and simply a plan to redistribute the wealth from the middle class to Wall Street.

So, it's not really just about robo signing. It's about creating a world in which we can't survive. We worked our whole life for that house. All of our money went into that house. Now, they just get to take it. And I will still be paying for it.