Mortgage Probe May Open New Path for Housing Relief

[Dover]

Source: IBT

A controversial weapon could be deployed soon in the U.S. fight against the housing crisis as states and top banks near a deal in their dispute over mortgage abuses -- cutting the mortgage debt owed by homeowners.

Five major banks could be required to commit roughly $15 billion to reduce principal balances for struggling homeowners and modify loans in other ways under a proposed deal to settle allegations linked to the "robo-signing" scandal.

That amount would be part of broader sanctions that could total $25 billion, small change for the giants of Wall Street but potentially sowing the seed for a new approach to tackling the housing crisis.


Read more: http://www.ibtimes.com/articles/239699/20111028/mortgage-probe-may-open-new-path-for-housing-relief.htm

[Autumn]

1. It sounds screwy to me.

Almost like a giveaway to Wall Street, who created this mess. It could reach around 300,000 borrowers, a fraction of the 11 million underwater homeowners. "That amount would be part of broader sanctions that could total $25 billion, small change for the giants of Wall Street" Small change indeed.

[DJ13]

2. to reduce principal balances for struggling homeowners and modify loans in other ways

I wish this kind of program was extended across the board to include those homeowners that have tried keeping their mortgage current.

It seems a bit unfair to reduce the principle only on those who havent tried paying on their mortgage.

[harun]

3. That's what I am ticked about. Just give some relief to everyone. Even those of us

who have paid our bills. My house is worth much less than I owe on it but have been blessed to keep my job, paying all along. So they need to just work out a plan that helps everyone not just a few people. It would help us all that way and be fair.

[SoCalDem]

8. It should have been FIRST on the "list",and it should have been automatic

for all mortgages on PRIMARY residences..

should have been a 30% reduction of principle and a re-set of mortgage to no more than 4% and no more "variable/interest-only/etc" home-loans.

Imagine the free-up spending power that would have unleashed..

[harun]

9. Totally agree. You don't hear one politician advocating this though.

[benh57]

5. HARP does that

The new HARP refi program does that. Rules come out Nov 15th. I may refinance under it, as the 125% max LTV is going away.

[SharksBreath]

4. The problem isn't just the bad loans

Those bad loans caused everyone to lose value in their house.

I brought my house for 218,000 in a foreclosure in 2004. Got a rate of 4% for 30 years.

For the neighborhood it was a hell of a deal.

Houses in the area were going for 260,000.

Houses rose to 300,000 in my neighborhood at the height of the bubble.

Now my house is worth 150,000.

So do I continue to pay a mortgage on a house that's worth 150,000 and will never be worth the 218,000 I paid for it.

Besides walking away what can a person in my situation do.

Your right. They need to find a way to help everyone because I'm about to just let this house go.

I actually thought about walking away, showing up at the auction and buying my house back at the reduced price.

[dixiegrrrrl]

6. Not only that, you do not know if the title is valid.

Since the banks that foreclosed on the property may not have had legal ownership.
If MERS was involved at some point, the chain of title was definitely broken, lawsuits have brought that out.

Which is why the bank fraud affects ALL homewowners in one way or the other.

[flvegan]

7. Careful there.

Don't know what state you're in, but some states have a rule that if the foreclosed homeowner purchases the home at the foreclosure auction for less than final judgment, the loan "comes back to life" In other words, you just bought your house again subject to the mortgage that was foreclosed upon.

Besides, your home may very well be worth what you paid for it again. Just might take some time to get there.