“Breaking Down the Mortgage Settlement”
I wonder if you will have the same reaction after you read the breakdown? Here is my take. The banks got off cheap! As time will go along and more news comes about this settlement, the homeowners that were wronged, won’t get much for their pain and suffering. Is anyone really surprised?
I have recently been contacted by two different people that had lost their home during robo-gate. In both cases, Chase was the institution that did the foreclosure. They called Chase, asking what steps to get the money they are due. One was told, no information was available as yet, the other was given another 800 number, that wasn’t working. They are off to a great start.
Breaking Down the Mortgage Settlement: How Far Does $26 Billion Go?
By: The Niche Report
The big bank settlement over mortgage servicing abuses was finalized last week, detailing the agreement’s actual terms.
Bank of America, Citigroup, Ally Financial (formerly GMAC) and JPMorgan Chase are on the hook for billions, which will be divvied up among penalties paid to the federal and state governments, direct payments to homeowners wrongfully foreclosed upon, and credits to the banks for providing “consumer relief.” (Read the government’s complaint and the banks’ consent judgment.)
Here’s a breakdown of key settlement numbers, showing where the money is going and how much help it will really provide for homeowners.
· $1.4 billion: total direct payments from the settlement to homeowners who were wrongfully foreclosed upon between 2008 and 2011.
· 750,000: foreclosed homeowners expected to qualify.
· $2,000: estimated average payout.
· 3.8 million: total foreclosures between 2008 and 2011.
· 25 percent: expected increase in foreclosures in 2012. That would mean about 1 million foreclosures, up from 804,000 last year, partly as a result of banks clearing a backlog held up by the settlement proceedings.
· $3 billion: total for which banks can be credited for offering refinancing to underwater homeowners who owe more than their homes are worth. (There are questions about exactly how the credits will work and why the banks are being given incentives rather than punishment.)
· $17 billion: total from the settlement that banks can be credited for offering loan modification ($10 billion) and other forms of “consumer relief” ($7 billion) for underwater borrowers — counted separately from the refinancing incentives.
· 11.1 million: underwater mortgages in the U.S.
· $717 billion: negative equity from those underwater mortgages.
· 3 million: estimated underwater mortgages owned or guaranteed by government-controlled Fannie Mae or Freddie Mac, which are not covered by the settlement.
· 5 percent: portion of the country’s underwater mortgages that might qualify for modification under the settlement, according to a Brookings Institute estimate. (Officials have put the number closer to 10 percent.)
· $10.9 billion: Bank of America’s total outlay in the settlement, more than any other bank.
· $2 billion: Bank of America’s fourth-quarter 2011 profit.
· $1 billion: settlement of allegations that Bank of America passed bad loans on to the Federal Housing Administration to insure. A government audit, made public with the settlement, showed similar patterns at other banks.
· $6 billion: amount that the FHA paid in insurance claims on defaulted mortgages handled by the five banks between 2008 and 2010.
· 60-200: documents signed daily by different individual loan processors working for Bank of America, according to the government audit.
· 12-18 inches: height of the stacks of documents one Bank of America employee signed “without a review.”
· $1 million: fine to be levied on the banks for each violation of the terms of the overall settlement, escalating to $5 million for repeat violations. (Exactly how fines will be tallied is still unclear.)
Joe Petrowsky, NMLS #6869
Right Trac Financial Group, Inc. NMLS #2709
110 Main St.
Manchester, Ct. 06042
Office: 860 647-7701 x116
Fax: 860 647-8940
Cell: 860 836-9294
Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.
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