Government Ordering Lenders to Reimburse Homeowners

Real Estate Agent with Solid Source Realty GA| Metro Atlanta |

Here is an interesting article I found on Yahoo....

I can only hope this "order" is serious!


Money House

WASHINGTON – The federal government on Wednesday ordered 16 of the nation's largest mortgage lenders and servicers to reimburse homeowners who were improperly foreclosed upon. Government regulators also directed the financial firms to hire auditors to determine how many homeowners could have avoided foreclosure in 2009 and 2010. Citibank, Bank of America, JPMorgan Chase and Wells Fargo, the nation's four largest banks, were among the financial firms cited in the joint report by the Federal Reserve, Office of Thrift Supervision and Office of the Comptroller of the Currency.

The Fed said it believed financial penalties were "appropriate" and that it planned to levy fines in the future. All three regulators said they would review the foreclosure audits. Under the agreements reached, the lenders and servicers have 45 days to hire an auditor and will "remediate all financial injury to borrowers caused by any errors, misrepresentations, or other deficiencies." There is no minimum or maximum dollar amount identified.

In the four years since the housing bust, about 5 million homes have been foreclosed upon. About 2.4 million primary mortgages were in foreclosure at the end of last year. Another 2 million were 90 days or more past due, putting them at serious risk of foreclosure.

Critics, including Democratic lawmakers in Congress, say the order is too lenient on the lenders. House Democrats introduced legislation Wednesday that would require lenders to perform a series of steps, including an appeals process, before starting foreclosures.

"I want to know what abuses (the government agencies) identified, which banks committed them and how their proposed consent agreement is going to fix these problems," said Rep. Elijah Cummings, D-Md., the ranking member of the House Government and Oversight Committee. "Based on what I have read ... I am not encouraged at all."

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Comments (1)

Dennis Burgess
AmeriTeam Property Management - Mid Florida, FL
Orlando Property Manager and Realtor

Hi, Christina:  Thank you for posting this.  I've been swamped and haven't had the opportunity to really look anywhere online besides here today, and haven't seen it.

With regard to the article, though, I have to respectfully disagree with you.  I can't "hope" for the big ol' government to do anything for the housing industry these days- I want the government out of it as much as possible.

Folks here can sit on their tails for well over a year without paying a dime of their mortgage- while our courts' caseloads have their foreclosures puttering along like an old-school jalopy.

Adding yet another layer to the process as Rep. Cummings wishes would just allow what's already a nightmare to keep getting worse.

Apr 15, 2011 12:12 PM