Thursday, February 9, 2012

Mortgage Relief Deal has been struck as Hold out States Join in

Well it is good news in recovery for homeowners across the nation.  The President gave a speech today stating how congress has negotiated a 25 Billion dollar deal to help homeowners affected by the housing crash and illegal foreclosure practices that took place.
Now some homeowners will receive a monthly stimulus that can help reduce their debt and increase thier equity in their home again.  It is a start to the housing market crises, BUT it does not fix much for everyone that has a home across America.  The reason why is that first, not all states participated.  Oklahoma did not sign this agreement and none of the Government backed loans like FHA, Fannie Mae or Freddie Mac are included in the program, which  means that it could be less than 1/3 of all home loans that would qualify for the program.
  Here is a money break down on how it would be allocated:

Money breakdown Under the terms of the agreement, the servicers are required to collectively dedicate $20 billion toward various forms of financial relief to borrowers. At least $10 billion will go toward reducing the principal on loans for borrowers who, as of the date of the settlement, are either delinquent or at imminent risk of default and owe more on their mortgages than their homes are worth.
At least $3 billion will go toward refinancing loans for borrowers who are current on their mortgages but who owe more on their mortgage than their homes are worth. Borrowers who meet basic criteria will be eligible for the refinancing, which will reduce interest rates for borrowers who are currently paying much higher rates or whose adjustable rate mortgages are due to soon rise to much higher rates.
Up to $7 billion will go towards other forms of relief, including forbearance of principal for unemployed borrowers, anti-blight programs, short sales and transitional assistance, benefits for service members who are forced to sell their home at a loss as a result of a Permanent Change in Station order, and other programs.
Because servicers will receive only partial credit for every dollar spent on some of the required activities, the settlement will provide direct benefits to borrowers in excess of $20 billion.
The Office of the Comptroller of the Currency also said on Thursday that Bank of America, Citigroup, JPMorgan and Wells Fargo have agreed to pay a penalty of $394 million as part of a settlement they reached in April 2011 with regulators over foreclosure abuses.  The banks can meet the terms of the penalty through payments they make as part of the larger settlement with the state attorneys general and the Justice Department the OCC said. (Reuters and the Associated Press contributed to this article)

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