NOTE: see sister blog Foreclosures, Evictions and You post for additional narrative re: settlement
YEAH MAXINE! Thank-you! WE are talking these people should be in jail not dictating what happens to those defrauded. The standard is triple damages.... not reduced principle or new loans with low interest (which many who are damaged cannot afford after losing jobs, equity and more).
Government, banks wrestle over settlements in botched foreclosures - Sacramento Business, Housing Market News | Sacramento Bee: "Rep. Maxine Waters, D-Calif., said $20 billion for principal write-downs was not enough money, given the scope of the problem. At the end of September, the total amount of negative equity - how much borrowers nationwide were underwater - was $744 billion, according to real estate research firm CoreLogic.
'This settlement is too small and will likely have one of two results: Either borrowers will receive insignificant principal reductions, or reductions will only be available to a small subset of troubled borrowers,' Waters said.
But others contend writing down principal could cause more problems by encouraging homeowners to stop making their monthly payments, hoping to score a reduction in what they owe.
'The magic wand is principal reduction ... but to what extent does it encourage people to stop paying?' said Bert Ely, an independent banking analyst. Some banks might balk at such a requirement, he said."