The big five mortgage companies in the country who had all hoped to escape the foreclosure fraud fiasco quickly and without having to open their pocketbooks to deeply could all be facing a bill in the tune of $20 billion dollars or even more. Bank of America, JP Morgan, CitiGroup, Ally Financial and Wells Fargo had all hoped for a $5 billion dollar settlement, but it doesn’t look like that is what they are going to get.
The five banks have been under investigation since last fall after they were accused of fraudulent practices when it came to foreclosure proceedings. The banks were being investigated for allegations of missing foreclosure paperwork, seizing homes without proper authority and even lying to judges, all to speed up foreclosure proceedings. Attorney generals in all states took action, quickly formed a task force and have been looking into the claims.
Negotiations have been underway for a settlement, and while the banks would like to see things settled quickly, some officials are saying not so fast. Some are pushing for deeper investigations to look at other bank practices that may also have been illegal. Many believe we need to look further to be able to find out the real damage that the banks have caused.
It appears that negotiations could continue for some time. With so many people having different opinions on the outcome, it might take a while to reach a final agreement.
the settlement deal must satisfy not only the Department of Justice officials overseeing the conversations but also state attorneys general, the Department of Housing and Urban Development as well as the Federal Trade Commission.
Meanwhile, the housing crisis does not seem to be anywhere near over. Housing prices continue to plummet across the country leaving many homeowners with under water mortgages. Additionally, nearly 2 million homes are currently under foreclosure proceedings.
In all of this however, banks seem to be rebounding and profits are up which means they will have the ability to pay up. When a deal is finally agreed upon funds that are collected from settlement will be placed into an account. Funds will then be allocated to homeowners who were wrongfully forced from their homes due to fraudulent foreclosure proceedings, although for many homeowners this compensation may be too little and too late.