Reuters: Obama Administration Pushes for Multibillion-Dollar Settlement of Mortgage Cases

[flpoljunkie]

Obama Administration Pushes For Multibillion-Dollar Settlement Of Mortgage Cases

First Posted: 02/23/11 10:44 PM Updated: 02/24/11 07:37 AM


NEW YORK (By Jonathan Stempel) - The Obama administration is trying to push a settlement that could force the largest U.S. banks to pay for reductions in loan principal worth billions of dollars following breakdowns in mortgage servicing, The Wall Street Journal said.

Should a settlement be reached, some state attorneys general are also pushing for banks to pay more than $20 billion of civil fines or to fund a similar amount of loan modifications for troubled borrowers, the newspaper said on Wednesday, citing people familiar with the matter.

Regulators are looking to settle with as many as 14 servicers, including three of the nation's four largest banks: Bank of America Corp, JPMorgan Chase & Co and Wells Fargo & Co, the newspaper said, citing people familiar with the matter.

The administration wants a commitment from loan servicers to reduce loan balances for borrowers who owe more than their homes are worth, and that such costs would not be borne by investors who bought mortgage-backed securities, the newspaper said, citing people familiar with the matter.

It would thus force servicers that mishandled foreclosure procedures to bear losses by writing down loans they service on behalf of clients such as Fannie Mae, Freddie Mac and other investors, the newspaper said.

more...

[WhiteTara]

1. the pukes are sure to fight this.

I hope the administration works on its messaging. This could unify people against the banks. But the Teabaggers are seemingly so stupid, they will probably get out and fight it tooth and nail. I wonder how they will feel when they are evicted after fighting to keep from being healed.

[flpoljunkie]

3. More from the Wall Street Journal...

A settlement must satisfy an unwieldy mix of authorities, including state attorneys general and regulators such as the newly formed Bureau of Consumer Financial Protection, who support heftier fines. They must also appease banking regulators, such as the OCC, that are concerned penalties could be too stiff.

"Nothing has been finalized among the states, and it's our understanding that the federal agencies we are in discussions with have not finalized their positions," said a spokesman for Iowa Attorney General Tom Miller, who is spearheading a 50-state investigation of mortgage-servicing practices.

http://online.wsj.com/article/SB10001424052748703842004576162813248586844.html?mod=WSJ_business_LeadStoryCollection

[FreakinDJ]

2. They need Jail Time - or they just add it to cost of doing business

and US the bankee pays the fines

[dixiegrrrrl]

4. I agree. Strongly.