The Banking and Strategy Initiative

Chillin' out till it needs to be funded

The Housing Recovery 2012: A $26 bln settlement with U.S. Govt.

The Government signed into an abiding contract a $26 bln settlement with the five large banks, according to the WSJ. Citi, Ally Financial, Chase, Bank  of America and Wells Fargo that together handle about 27 mln mortgages or 55% of all US mortgages and as of midnight 8 hours ago, the banks had signed up the settlement with 49 states, Oklahoma holding out and likely to be included in the final announcement in the next couple of hours.

Only $5bln is counted to fines including $1.5 bln for those who foreclosed since September 2008 right till the last month of 2011 at $2000 each ($1500) $20 bln would go to incentives including $20,000 each paid by banks to reduce the loans and refinancing underwater mortgages. Banks are currently offering up to $35000 outside the settlement to those willing to forecloseo n a short sale 9 loan amount left over , is not being charged back or left pending against the owner either)

Meanwhile Banks will also be open to being sued after the settlement with some State Ags starting action this month itself and Obama giving them a honorable mention in the State of the Union

WSJ

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This entry was posted on February 9, 2012 by in Financial Markets and tagged , , , , , , , , .

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