Wow! There is a settlement with some banks and because the banks screwed up their paper work on valid foreclosures (as opposed to any wide-spread illegal foreclosures); thousands of homeowners will be helped.
According to an article in the Wall Street Journal:
The agreement is expected to call on the banks to provide $20 billion in other aid—by cutting loan balances for tens of thousands of homeowners and by refinancing thousands of borrowers who are current on their loans but owe more than their homes are worth.
Gee I wish someone had helped me in 1987 when I bought I house using 10% down with a mortgage at 9.45% that was underwater for nearly tens years after that. What’s different today? Well, today politicians are seeking to gain favor, create positive headlines and make you think all this money squeezed from the banks will somehow stimulate the housing market. That’s hard to see happening given these folks are unlikely to do more than stay where they are. And why not, they have a good deal.
If you did not take thousands in home equity from your home, if you have been in your house for several years, if you bought it with a reasonable down payment and you are still having a tough time with mortgage payments, you should be mad.
Illegal or unjustified foreclosures should be remedied, including reasonable compensation to those harmed. A massive screwup in paperwork that did not change the end result of a valid foreclosure is quite another matter. The process needs to be fixed. However, this settlement is nothing more than getting the private sector to fund an attempt to correct another government screwup. And yes, the root cause of all this is government policy going back to the 1990s. I heard a discussion on the radio yesterday about the housing crisis and when one person mentioned this fact another participant claimed it was all the fault of the financial industry because they lobbied for the changes. Think about that for a minute, banks had to lobby members of Congress to lower their own lending standards?
However, the real point is that even if that were absolutely true, Congress took the action, passed the laws and pressured for subprime loans. Where is the integrity in that? If someone encouraged your child to throw a rock through a window, whose fault is the broken window?
Related articles
- DOJ: Major Banks To Pay $26 Billion To Reimburse Homeowners (washington.cbslocal.com)
- Feds announce $25B settlement over foreclosure abuse – Fox News (foxnews.com)
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