New York and California Expected To Join The Mortgage Debate. In a housing sector that still lacks consumer confidence, several states nationwide challenged real estate mortgage providers to change their policies. More than a million homeowners would find relief as New York and California join the battle to force nation’s largest banks to sign a foreclosure settlement. Sources familiar to the situation, say state settlement is expected in mortgage debate on later this week.
Bank of America, JP Morgan Chase, Wells Fargo, Citibank and Ally Financial agreed to a settlement, Wall Street writes it was evaluated at $37 billion this Wednesday. So far, the nation’s largest banks have been scrutiny coming from 25 states of the nation, and now New York and California joined in to strengthen their standing.
On Wednesday night, the parts involved were still working the details of the settlement, but as Wall Street’s source said Delaware, Massachusetts and Nevada are expected to also agree to the settlement. At the same time, New York and California have already joined in.
Although the settlement value varies among sources, the settlement will help lower homeowners’ mortgage principal, refinancing, checks to homeowners and the reserve account.
Wall Street’s source said that on top of that, the settlement will give “immunity from civil lawsuits brought by the attorneys general against the lenders over narrowly defined “robo-signing” cases”. The settlement will allow regulators to make full pursue of all claims over mortgage – backed securities that collapsed. The facts from robo-signing claims will be used in securities, insurance and tax fraud cases.
The settlement will provide some form of benefit for more than 46,000 borrowers in the state of New York, while 21,000 are estimated to receive a reduction of the amount they own.
Part of a broad nation effort to offer homeowners some relief after the past year’s mortgage issues, the settlement will help four million Americans who’ve been foreclosed since 2007, with California, Florida and Arizona leading in the list of worst impacted states.
NY Times writes that “about one in five Americans with mortgages are underwater, which means they owe more than their home is worth”. All in all the whole amount homeowners own on their mortgages is a negative equity of almost $700 billion, with each homeowner being underwater by $50,000 each on average.