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A study from three top economists says that a proposed mortgage servicer settlement from state attorneys general and a host of federal agencies would do more harm than good.
April 11 -
The only bank that has been penalized for mortgage servicing lapses got slapped for doing the opposite of what state attorneys general have been demanding.
April 10 -
It shouldn't come as a surprise that before it's even finalized the settlement is under attack by some in Congress who don't want banks held to account for their actions. But banks should be held accountable, and if anything the proposed terms should be strengthened.
April 5 -
Elizabeth Warren sent a letter to House Financial Services Committee Chairman Spencer Bachus responding to complaints he made that she went further than simply providing advice in pending servicer settlement talks.
April 4 - PH
Frustrated by the lack of a global settlement between state attorneys general and top mortgage servicers, federal banking regulators are expected to move forward with their ...
March 31 -
Bank of America's servicing settlement, with 11 state attorneys general in October 2008, is an object lesson in how not to make peace with a mortgage servicer.
March 24
WASHINGTON — Iowa Attorney General Tom Miller blasted a study Tuesday that said proposed servicer settlement terms could cost the economy $10 billion a year. Miller, who is leading the settlement on behalf of the attorneys general, said the study was "grossly inaccurate," and noted it was paid for by the financial services industry, including some of the servicers involved in talks with the AGs.
"This is a flawed study based on inaccurate assumptions, and it reaches grossly inaccurate conclusions," Miller said in a press release. "This study was bought and paid for by the industry, and that fact is reflected throughout."
The study found that the proposed settlement with the top five mortgage servicers could prolong the foreclosure crisis, drive up mortgage interest rates, slow new home construction and cost $7 billion to $10 billion a year. The study, which was obtained by American Banker, was written by three economists: Charles Calomiris, a professor of financial institutions at Columbia Business School; Eric Higgins, a professor of finance at Kansas State University; and Joseph Mason, the chair of banking at Louisiana State University and a senior fellow at the Wharton School.
Miller said the study's conclusions were wrong.
"The study's assertion that our proposed settlement will lengthen foreclosures is off the mark," he said. "Our proposal, if properly implemented by the servicers, should not increase the duration of foreclosures. By making foreclosures functional, servicers will make up time they're losing now. The current dysfunctional system prolongs foreclosures."
Miller is conducting the settlement talks along with the Justice Department, Housing and Urban Development and the Consumer Financial Protection Bureau.
