Mortgage Deal Is Built on Tradeoffs

Remember that big, ballyhooed mortgage settlement of early last year? The one where homeowners got $25 billion of relief (well actually only around $5 billion in cold cash, but why bother with pesky details?) The one made possible by Eric Schneiderman abandoning his fellow state attorneys general to grasp the brass ring of a do-just-about-nothing Residential Mortgage-Backed Task Force?

The $25 billion settlement with banks over alleged foreclosure abuses will provide financial relief to an estimated one million at-risk borrowers, raising new hopes for an economy still hurting from the mortgage bust.

In unveiling a landmark $26-billion settlement of investigations of foreclosure abuses, federal and state officials said Thursday they were holding the nation’s five largest mortgage servicers accountable for the problems while also providing help to up to 2 million homeowners affected by the collapse of the housing market.

When the media discusses how banks have ridden like a steamroller over borrowers and investors, the typical response is a combination of minimization and distancing: that the offense wasn’t such a big deal and that it was a mistake. Recall the PR barrage in the wake of the robosigning scandal: its was “sloppiness,” “paperwork errors”. Servicers kept claiming, despite overwhelming evidence of bad faith and the institutionalization of impermissible practices, that there was really nothing wrong with how they were operating.

The $25-billion settlement gives the nation's largest mortgage servicers more incentives to help those who owe 40% to 75% more than the value of their homes.Homeowners more deeply underwater on mortgages handled by five major U.S.

The government filed in federal court Monday a $25 billion settlement with the five largest mortgage lenders, putting an official stamp on the landmark agreement over alleged foreclosure abuses.The court ...

The government has filed a $25 billion settlement with the five largest mortgage lenders in federal court, putting an official stamp on the landmark agreement announced last month over alleged foreclosure abuses.

When did it become the job of the minister of finance to boost bank profits and stick it to the consumer? How else do you describe a policy in which the minister of finance appears to tell the banks to cool it when it comes to battling on the mortgage front for customers. If I’m buying a home today I say: Bring on the mortgage rate wars! But Jim Flaherty’s comments seemed aimed at getting the banks to try and curb some of the heated competition that happened a year ago when the banks started battling for market share.