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Closing In On The Mortgage Deal Between Government And Major Lenders

Inside the Stats and the Stories of the Real Estate Industry

According to the Des Moines Register a settlement is near between nearly all fifty states and the five largest mortgage servicers that ought to be in place in time for Christmas. Iowa Attorney General Tom Miller is spearheading the negotiating despite reticence from New York, California and a suit brought by Massachusetts Attorney General Martha Coakley.

Miller and the majority of the states have been negotiating since earlier this year for the deal that will release the five servicers Ally Financial, Bank of America, Citigroup, JP Morgan Chase and Wells Fargo from legal claims on past home loan servicing and foreclosures, The deal doesn't prevent individuals from suing the banks or government prosecutors from suing the banks over packaging of home loans into mortgage backed securities.

In return for agreeing to the deal banks would agree to pay what Miller called "substantial principal reductions" for homeowners who owe more money than their homes are worth and agree to a set of and agree to a set of mortgage servicing standards, interest rate reductions, and cash payments to some homeowners who have already gone through foreclosure.

Hold outs on the deal like Coakley believe the deal does not hold the servicers accountable enough nor protect future consumers interests fully.

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