National Mortgage Settlement Makes Waves
The Federal Government, 49 States Attorneys, and the five largest mortgage banks came to a 25 billion dollar settlement regarding the improper foreclosure servicing that took place since 2008.
As a St Louis Realtor, we've been reading up on this business for some time. No one knows exactly how things will play out, but we do know it will have implications on the St Louis real estate market.
The talk has been that the settlement will force banks to perform more loan modification and debt reduction plans to troubled borrowers. It will also set a clear legal standard for future foreclosures and short sales.
Right now, the settlement only applies to Wells Fargo, Citibank, JP Morgan Chase, Bank of America and Ally Bank. Other smaller banks are expected to join the settlement in the near future, increasing it to 30 billion dollars.
The obvious goal is to help home owners stay in their homes. Ideally that means that fewer foreclosures will take place. Analysts are saying just the opposite. That these banks were waiting for the settlement to take place and for the clarity on foreclosure standards and that they have been waiting for this clarity to move forward on a backlog of troubled loans. Everyone knows that water finds its own level. The real estate market and banks need some help in finding their 'level' but by helping the nations real estate market and banks to reduce the bad debt and put "distressed homes" into the hands of new owners will put the real estate market in better health.