SALON

Monday, Jan 7, 2013 12:02 PM UTC

Banks to pay $10B for foreclosure abuses

The settlement will go to Americans who lost their homes or are in danger of losing their homes

By

Topics: Wall Street, Foreclosure, Mortgages, Housing, U.S. Economy, ,

Banks to pay $10B for foreclosure abuses Foreclosed home(Credit: via Wikimedia)

Following negotiations between government officials and banks, a $10 billion settlement for foreclosure abuses like “flawed paperwork and botched loan modifications” is expected today, the New York Times reported:

An estimated $3.75 billion of the $10 billion will be distributed in cash relief to Americans who went through foreclosure in 2009 and 2010. Another $6 billion will be directed toward homeowners who are in danger of losing their homes after falling behind on their monthly payments. The deal follows a week of feverish negotiations, and it almost fell apart over the weekend. Some officials at the Federal Reserve threatened to scuttle it unless the banks agreed to pay an additional $300 million for their role in the 2008 financial crisis that torpedoed the housing market and led to millions of foreclosures.

According to the Los Angeles Times:

Banks and regulators worked late Sunday to finalize a nearly $10-billion settlement that would halt a much-maligned program to review foreclosures from the height of the housing crisis, according to four people familiar with the talks.

At least 14 banks are involved. Since the reviews began in late 2011, the banks have paid $1.5 billion to consultants examining foreclosure records — but not a penny to aggrieved borrowers.

Despite the massive sum, not all comsumer advocates are satisfied. “”There’s been a real lack of transparency in the foreclosure reviews and this settlement,” California director of the Center for Responsible Lending Paul Leonard told the west coast paper.

 

Alex Halperin is news editor at Salon. You can follow him on Twitter @alexhalperin. More Alex Halperin.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments

 4 Comments

Comment Preview

Your name will appear as username

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

Popular on Reddit

links from salon.com

vote
Journalists file suit against Manning's trial secrecy: Plaintiffs including Glenn Greenwald and Julian Assange demand press, public access to trial and documents
141 points142 points | comment
vote
Report: Nearly a quarter of Americans struggle to afford food
122 points123 points | 12 comments
vote
Kaitlyn Hunt refuses plea offer, will go to court over high school relationship - The 18-year-old rejected a deal that would have labeled her a sex offender and placed her under house arrest
118 points119 points | 85 comments
vote
Kaitlyn Hunt refuses plea offer, will go to court over high school relationship - The 18-year-old rejected a deal that would have labeled her a sex offender and placed her under house arrest
106 points107 points | 29 comments
vote
Ted Cruz against the world - How the Junior Senator is igniting the GOP civil war
77 points78 points | 19 comments

From Around the Web

Presented by Scribol
listener_new_rect The Listener: Chekhov's story mirrors Russia's own

Recommendations