From BI and cnbc:
Rochdale’s Dick Bove went on a tirade this morning on CNBC’s “Squawk on the Street” claiming the joint state-federal mortgage settlement, which he dubbed in a note earlier as “the mortgage deal from hell,” unfairly impacts those homeowners who pay their bills.
“If you’re going to do something which is going to reduce the value of existing homes where people are making their payments, every American should stop making his payments on his mortgages, send a letter to the Attorney General in his state and say ‘I qualify to have my principal reduced because I’m not going to make any more payments on my house,'” Bove said.
The banking analyst also said the agreement, which is expected to be around $26 billion and could increase if more banks join, will hurt the U.S. economy rather than stimulate it.
“These people were not making payments on these houses in the first place and, therefore, they’re not getting the new flow of cash … they’re not getting anything other than the government has decided to pay everyone who cheated on their mortgages 2,000 bucks, right. The second thing is, you are going to be reducing the prices of a lot of houses in the United States where payments are being made because the house next door is seeing the principal balance on the mortgage taken down,” he explained.
“This is not a stimulus to the United States economy. It depresses the United States economy.”
As of right now, Bank of America, JPMorgan Chase, Wells Fargo, Citi and Ally Financial are all expected to be part of the mortgage settlement.
At this point, all we have are press releases about the agreement, not the actual agreement.
http://www.nationalmortgagesettlement.com/
As of this posting, the document link says:
“Settlement Documents
National Mortgage Settlement (coming soon)”
The devil will of course be in the details which I don’t think have been published.
Personally, I am not at all encouraged by the Federalization of state mortgage issues.
There will be a day when the person you vote for will or will not effect the amount you pay on a mortgage. It’s coming…
If this plays out as advertised, I’m going to feel like the biggest chump at the table for wasting all that money paying my mortgage all these years. To show you how dumb I am, I’m not even underwater!
That clearly means I didn’t buy enough house to get the rest of the taxpayers to pay for part of it.
Who’s going to pay for this?
Must be an election year.
He is absolutely right.
Why isn’t the settlement money being used to pay back our $147 billion and counting bailout of Fannie and Freddie? They are the ones who really got screwed by the banks, and the taxpayer is on the hook.
That would be fair – every taxpayer would benefit….for a change.
Bove’s example about two next-door neighbors with identical homes was stunning…
Moral hazard hasn’t been factored into any of the housing programs.
The massive settlement announced Thursday between attorneys general and several big banks means a lot of money changing hands, but it also means big changes to the way lenders handle defaults and foreclosures.
The settlement, joined by every state except Oklahoma – which negotiated its own settlement — closed at $26 billion. That amount probably isn’t enough to really punish banks, who in all likelihood put money away for this for the last several months in anticipation, but it probably will be enough to help struggling homeowners – even if only a little.
But the move goes far beyond the banks, and includes new rules and regulations for loan servicing and foreclosures going forward. They are expected to up customer satisfaction, reduce liability for banks, and clean out the robo-signing impasse and standardize the process in order to make it more efficient.
Specifically, it forces lenders to rethink how they interact with homeowners struggling to keep up with payments. They will no longer be able to attempt foreclosure on borrowers that they are simultaneously discussing mortgage modifications with, and they’ll have to give borrowers one point of contact instead of giving them several different employees for each interaction.
So while it’s true that only a small fraction of current foreclosures will be helped in any way, this means big things for the future mortgage servicing industry. It will speed up processing, and perhaps mean that foreclosures that have been waiting around since robo-signing came to light in 2010 will now gain legitimacy.
The settlement may not be as much as some were hoping for, but it does go a long way in streamlining the process and making it more logical — something I would expect after over 16 months of negotiations. This isn’t going to solve all of the problems we have right now, but its at least a step in the right direction. And at least, it’s over. For now.
http://www.housingwire.com/blog/robo-settlement-impact-future-foreclosures
So the free-rent will slowly widdled away as these new rules and guidelines are put in place?
“But this deal not only doesn’t end robosigning, it officially makes getting caught for it inexpensive.”
http://www.rollingstone.com/politics/blogs/taibblog/why-the-foreclosure-deal-may-not-be-so-hot-after-all-20120209