SETTLING WITH MORTGAGE LENDERS.
The Osgood File. Sponsored in part by Barbasol Shaving Cream, America's leader for a close shave. Close shave, America. Close shave, Barbasol. This is Charles Osgood.
The top five mortgage lenders in the United States - Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial - have agreed in principle to settle for 25 billion dollars less than the face value of what's owed them - on one condition...
SOT - Guy Cecala, president and editor of Inside Mortgage Finances
"In return for forking over 25 billion dollars, the top five banks would get assurances from state regulators - and also from Federal regulators - that they could not sue them for foreclosure abuses on anything they discover down the road during the period from 2008 to 2011." (:19)
Mortgage expert Guy Cecala of Inside Mortgage Finance. More from him after this...
((( SPOT )))
The draft agreement with the America's five biggest lenders has been sent to officials of all the states for their approval.
Mr. Cecala, will they be willing to let the banks off the hook for foreclosure abuses yet to be discovered? Even for 25 billion dollars?
SOT - Guy Cecala
"Right now, I don't think it's going to be possible to get all fifty states to agree on it. It's a question of how many we're going to get - how many are actually going to sign up on it." (:09)
It sounds like a lot of money - but it would not solve the whole mortgage crisis, would it?
SOT - Guy Cecala
"The agreement as drafted now only involves the top five banks in the mortgage servicing business. And while they account for about 56 percent of all mortgages outstanding, it's not 100 percent." (:13)
And aren't a lot of the problem mortgages packaged into derivatives and sold on the securities market? Would this deal with the banks affect those?
SOT - Guy Cecala
"This could be targeted at only a relatively small part - roughly one third of the mortgage market involves privately held mortgages by banks. The rest are in securities, which are basically outside the reach of this settlement." (:14)
Which you don't think the states will buy, anyway.
SOT - Guy Cecala
"No question you're not going to get all fifty to sign on. The question is: Can you get a majority of them - and will the banks accept that." (:07)
The Osgood File. Charles Osgood on the CBS Radio Network.
The Osgood File. January 24th, 2012. |
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