A proposed $25 billion settlement between five big banks, state attorneys general and the Obama administration may help resolve some of the thornier legal issues surrounding the mortgage mess that caused the housing market to collapse.
The deal would require banks to devote roughly $17 billion of the total settlement to various types of loan modifications for homeowners. Rather than paying that amount in cash, lenders would receive a series of credit toward that amount based on a complex formula that would assign different levels of credit to different types of modifications. Decisions about which loans to modify would be left to bankers.
The program would apply largely to the home loans owned outright by the five lenders, including Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial (formerly GMAC).
Loans held by government-controlled Fannie Mae or Freddie Mac — some 60 percent of the 31 million U.S. home loans outstanding — would not be covered in the deal.
Kathi Soprano Russo CDPE SFR
RE/MAX Elite
Las Vegas , Nevada
(702) 277-0075
