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Is the right way to hold banks accountable for servicing errors to require them to disgorge funds to borrowers who themselves may have been equally complicit in the process of helping to create mortgage fraud?
February 20 -
While the industry waits to see the final, detailed terms of the mortgage servicing settlement, officials released two documents Tuesday summarizing the highlights of the deal.
February 14 -
Multiple state and federal officials put the banks on notice that the $25 billion mortgage servicing settlement is just the first step in pursuing civil litigation and criminal prosecutions in connection with misdeeds before, during and after the financial crisis.
February 9
WASHINGTON — The Obama Administration is pushing back against a recent news report that concluded U.S. taxpayers will subsidize the roughly $25 billion mortgage settlement.
The loan-mod program — known as the Home Affordable Modification Program, or HAMP — uses tax dollars to provide incentives to loan servicers and investors to make mortgage payments more affordable, including through the use of principal reductions.
In a
"For HAMP modifications that do include principal reduction, servicers only receive credit for the portion of the principal reduction that they themselves pay for, not for the portion covered by incentives in the program," the blog post states.
"In other words, if a servicer receives a HAMP incentive of 40 cents for every dollar of principal reduction, it can receive credit at the applicable rate on the remaining 60 cents."
HUD also pushed back against the idea that the settlement may have been designed to boost HAMP's numbers, which have fallen well short of the administration's original goals.
"Whether people are helped through HAMP or through the settlement, this is not about who gets to take credit. It is about trying to stabilize a housing market that has been a drag on our economic recovery with all the tools we can muster," the blog post states.
The settlement agreement, which was announced on Feb. 9, has still yet to be finalized. The settlement's website states — as it has for the last 13 days — that the agreement is coming soon.
