The BulleTin Board

Big banks cough up $26 billion

Big bank payout
The U.S. government and five major banks Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial last month agreed to a $26 billion mortgage settlement for wrongful mortgage servicing practices. The money will be paid out to about 1.75 million Americans.

Compiled by Russell Steinberg

New Yorks cut

NYS will receive roughly $136 million the settlement largs est per-borrower cut of the 49 states that signed on. The federal government estimates that more than 46,000 borrowers in New York w ill benefit from the deal, with around 21,000 getting a reduction in the debt owed on their mortgages.

Individual aid

Victims of wrongful foreclosure will receive checks for $1,500 to $2,000. Funds will also be allocated for loan modifications and legal assistance for underwater borrowers. President Barack Obama said in a speech that the deal will begin to turn the page on an era of recklessness.

Imperfect plan

New York AG Eric Schneiderman was critical of the deal, saying it let banks off too easy. The settlement will only impact loans serviced by the nations biggest lenders, or about 55 percent of all mortgage holders, though the government hopes to eventually strike a deal with nine additional banks. (Wall Street Journal)

New York State currently faces a record 100,000 impending foreclosure cases, with tens of thousands still potentially to come. NYC saw 996 first-time foreclosures in 2011, but thousands more were notified last year that theyre in danger of losing their homes. (NYT, Daily News)

Good timing

Past due

Nationally, the number of late mortgage payments increased in 2011s fourth quarter, the second straight quarter of increases after nearly two years of declines. Indeed, 6.01 percent of mortgage holders were at least 60 days late on their payments, compared to 5.88 percent in the third quarter. (Associated Press)

Lawsuit pending
Schneiderman filed a separate suit last month against three of the banks included in the settlement, alleging fraudulent use of the electronic mortgage database MERS, which he claims made it easier to improperly foreclose on homes. He said MERS filed more than 13,000 foreclosures in the Empire State.

Bloombergs new bill

Last month, Mayor Michael Bloomberg signed a bill requiring banks to notify the citys Department of Housing Preser vation and Development at least 15 days before beginning foreclosure proceedings on a home. Banks will face a penalty of up to $1,000 for each week they fail to comply. (WNYC)

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20 March 2012 www.TheRealDeal.com