EconomicsUSA: Mortgage payments adrift: Squatters get paltry settlements and wait for axe to fall
refWrite comment: It looks like one of those damned-if-you-do, damned-if-you-don't situations. Banks have been sitting on unforeclosed homes, some in which the owners are not paying their monthly mortgage requirements but virtually squatting in the dwellings they once owned, to which they no longer have a viable legal claim. The banks didn't toss them out. The banks sat quietly while their lawyers took up the task of negotiating a grand settlement with the Attorneys General of the several states. Now a settlement has been reached, fees will be paid to some dispossessed home owners. And then the sad 'fun' begins. Another round of foreclosures is expected. This time, it seems that there won't be any settlement for the next wave of folks who will lose their homes once unfinished business has been cleared out of the way by the current negotiations. Nevertheless, housing prices will "hit rocke bottom" before they can rise again, and people who haven't yet lost their devalued dwellings can see prices again on the rise, so we are told by the experts. — EconoMix
Will $26 billion settlement from big banks repair US housing market? (+video)
In the short term, the deal between 49 states and five big banks may actually boost foreclosures, some say. In the longer term, it should clear the inventory of homes that depresses prices, and thereby help the middle class.
In a historic settlement, five of America’s largest banks have agreed to pay $26 billion to settle a lawsuit charging poor servicing of mortgages as they went bad and illegal use of automatic signature devices on legal documents for the years 2008-11.
The settlement of the lawsuit, brought by states’ attorneys general in 2010, means many individuals in the midst of foreclosure proceedings will see the principal they owe on their mortgages shrink by as much as $20,000, reducing their monthly payments. The share of the settlement the banks will commit for principal reduction for struggling homeowners is $17 billion.
In addition, the banks agree to give individuals who have lost their jobs a one-year grace period to find a new job before beginning foreclosure proceedings. They also designated $3 billion of the overall settlement to help homeowners refinance their loans at a 5.25 percent interest rate. Some 750,000 people who have already lost their homes may get a check for $1,800 as compensation for the banks’ behavior.
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