$25 billion Mortgage Fraud Settlement

Jeffrey Rubin — Fri, 10 Feb 2012 15:29:00 GMT

The US government reached, on Thursday, what is being touted as a landmark deal, with some of the nation's biggest mortgage lenders -- Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Ally Financial -- over foreclosure and mortgage abuses which occurred after the burst of the housing bubble.

The deal requires five of the largest banks to reduce loans for around $1 million households which are at risk of foreclosure. It also requires that the lenders send out checks to approximately $750,000 people who were improperly foreclosed on.

Seems good, right?

Well, actually, the agreement is not all that it is cracked up to be. What you have to keep in mind is that this only covers about less than half of all US Mortgages because the other half are Fannie or Freddie, as well as other lenders and servicers that aren’t part of the agreement and therefore will NOT be covered under the settlement.

Also, for those that have already lost their homes, in part due to the robo-signing scandal, they will only receive around $1,800 and not all will even qualify for that.

The so-called principal write down sounds great, but if you are upside down by hundreds of thousands of dollars, which may be the case here in Florida, the write down will not impact you enough to help.

Of course lost in all of this is any official acknowledgement of wrong-doing by the lenders. If the average person would have perpetrated a fraud, even on a less grander scale on the public, government and court system they would be in jail for a long time. Yet the executives at these lenders will get away with just signing over some money.

And truly, where did that money come from?

Did part of it come from the TARP funds given to them from the Federal Government at 0% interest that were invested and factored and then paid back out of the profits they made with them?

Bottom line is, if you are behind in your mortgage you should be pro-active and contact a real estate or legal professional about planning the best strategy to avoid foreclosure.

Jeffrey Rubin : florida, wells fargo

$25 billion Mortgage Fraud Settlement

Also, for those that have already lost their homes, in part due to the robo-signing scandal, they will only receive around $1,800 and not all will even qualify for that.

The so-called principal write down sounds great, but if you are upside down by hundreds of thousands of dollars, which may be the case here in Florida, the write down will not impact you enough to help.

And truly, where did that money come from?

Did part of it come from the TARP funds given to them from the Federal Government at 0% interest that were invested and factored and then paid back out of the profits they made with them?

Bottom line is, if you are behind in your mortgage you should be pro-active and contact a real estate or legal professional about planning the best strategy to avoid foreclosure.