Regulators announced the deal on the same day that Bank of America agreed to pay $11.6 billion to government-backed mortgage financier Fannie Mae to settle claims related to mortgages that soured during the housing crash.
The agreements come as U.S. banks are showing renewed signs of financial health, extending their recovery from the 2008 crisis that nearly toppled many of them. They are lending more and earning greater profits than at any time since the Great Recession began in December 2007.
Monday's foreclosure settlement doesn't close the book on the housing crisis, which caused more than 4 million foreclosures. It covers only consumers who were in foreclosure in 2009 and 2010. Some banks didn't agree to the settlement. And resolving millions of claims involving multiple banks and mortgage companies is complicated and time-consuming.
"It's going to take a few more years to get it sorted out," said Bert Ely, an independent banking consultant.
Michael Allen of Petersburg, Va., hopes to benefit from the settlement. He lost his home last month after 21/2 years of trying to modify his mortgage. He had fallen behind on his payments after the plant he was working closed.
"I was working with the banks to re-modify (my loan), and I'd get to the final stages and I'd have to start over again. They didn't give me any reason. I'd call them, they'd transfer me from one person to the next. ... They just kept giving me the runaround."
Citigroup said in a statement that it was "pleased to have the matter resolved" and thinks the agreement "will provide benefits for homeowners." Citi expects to record a charge of $305 million in the fourth quarter of 2012 to cover its cash payment under the settlement. The bank expects that existing reserves will cover its $500 million share of the non-cash foreclosure aid.
Bank of America CEO Brian Moynihan said the agreements were "a significant step" in resolving the bank's remaining legacy mortgage issues while streamlining the company and reducing future expenses.
- Boy Scouts open membership to all boys,...
- Defending the Faith: A case for the...
- Gallup poll shows shift in views on morality...
- Wash. I-5 bridge collapse caused by oversize...
- Scouts likely to face further turmoil
- One third of millenials regret going to college
- Mistake or miracle: New evidence on the...
- Affordable Care Act could bring 'skinny'...
Subscribe
Mobile
RSS
- Defending the Faith: A case for the...
59 - Boy Scouts open membership to all boys,... 43
- Journalists criticize Obama... 38
- IRS official Lerner invokes Fifth... 22
- Former IRS chief to Congress: Can't say... 21
- More Obama aides knew IRS targeted... 19
- US companies challenging contraception... 19
- Gallup poll shows shift in views on... 17
I suppose it would be well to present a little more foreclosure news.
The Office of the Comptroller of the Currency was bound and determined to find trickery by those big bad banks when it came to loaning money. After taking 20 hours per file More..
No need to worry about the unclaimed funds for bad bank debt, the banks will figure out a way to claim it so isn't returned to the tax payers.
The banks and mortgage loans are not even attempting to any changes, they are just More..
The "fraud" associated with bad foreclosures amounts to nothing more than not being able to produce the original documents (mostly because of the MERS mess). That's bad management. It fails to meet the test for fraud.
The More..