Report on National Mortgage Fraud Settlement

We reported earlier on the national mortgage fraud settlement between the federal government, state attorneys general, and the five largest mortgage servicers. (Go here and here, for instance.) The settlement's official website has lots of information, including an executive summary, which sets out some of the settlement's key terms. The summary discusses the billions of dollars aimed at helping homeowners facing foreclosure to stay in their homes:

The settlement requires the five banks to allocate a total of $17 billion in assistance to borrowers
who have the intent and ability to stay in their homes while making reasonable payments on their
mortgage loans. At least 60 percent of the $17 billion must be allocated to reduce the principal
balance of home loans for borrowers who are in default or at risk of default on their loan payments.
Many homeowners, particularly in states like Florida, Arizona, Nevada and California, have
negative equity in their homes and have no realistic ability of refinancing or selling their homes, or
to build equity. Principal reductions will also yield lower payments and will give homeowners a
fair opportunity to preserve their homes.

On August 29, 2012, the settlement monitor, Joseph A. Smith, issued his first progress report on the settlement. At Credit Slips, Adam Levitin offers a preliminary (and skeptical) assessment of the report, pointing out, among other things, that only a tiny percentage of underwater borrowers have been helped by the settlement so far.

0 thoughts on “Report on National Mortgage Fraud Settlement

  1. settlement quotes says:

    Many homeowners, particularly in states like Florida, Arizona, Nevada and California, have
    negative equity in their homes and have no realistic ability of refinancing or selling their homes

  2. Baarr Suvo says:

    there is a experience of fraud calls and I check out this website, which is help me a lot..
    You know about fraud-checking calls, of course. Whenever one does something unusual with your cash, like try and close using a house purchase, transfer funds to a close relative who’s lost everything although abroad, or buy a major gift for a very wedding day, the transaction is often then a call from the bank, demanding that you verify your identity to them, handing over all varieties of personal information to an overall stranger who’s rung you up seemingly unprovoked. Then they tell people that they’ve noticed a thing amiss, and is your card in your possession, and did you actually just try and transfer one thousand pounds to Lagos?
    The particular banks, bless them, are merely trying to prevent sham, but this is a fairly silly way of going about it. For starters, there’s the business involving calling up people and asking them to offer you all the information necessary to prove they are indeed a bank customer – all the info that a fraudster must impersonate that person with the bank, in other words. The banks have put in decades systematically conditioning us to offer our personal information to be able to fraudsters, which is a strange solution to prevent fraud.
    But a minimum of this silliness had one saving grace: a fraudster can only make numerous calls per day, and so the scope of losses from this type of programme of bad security education is limited by the human frailties involving con-artists.
    Enter the robo-caller. The banks are now outsourcing their fraud prevention to computers that could make dozens of calls in a short time, around the clock, fishing (or phishing) intended for someone who just happened to get made an unusual purchase and is thus willing to spill all his details down the phone to get it accepted. Note that most on the categories of purchase that trigger false positives from fraud detection systems can also be the sort of matter that customers are anxious to view go off without any hitch. The unusual along with the urgent often travel together.

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