The Obama Administration and state Attorneys General were close to making a deal with banks for their improper handling of foreclosures. But those plans may no be derailed after the President’s State of the Union address.
In that address, President Obama proposed a new unit of prosecutors that would expand investigations into fraudulent foreclosure practices and the bundling of mortgages into securities.
In exchange for writing down the principles on mortgages for underwater homeowners and paying a $25 billion dollar settlement, mortgage lenders asked for a broad release from any future liabilities arising from the housing crisis. Jamie Dimon CEO for JPMorgan told CNBC, that further investigations have a “pretty good chance” of derailing the settlement.
The improper foreclosure practices employed by banks led a number of wrongful foreclosures. Some savvy
foreclosure attorneys have been able to contest a foreclosure because of the fraudulent practices of large banks.
Dimon also told CNBC, speaking from Davos, Switzerland, “I think it would be better for America if the settlement took place.”
However this would make it possible for banks to avoid any future accountability for fraudulent foreclosure practices that have not been thoroughly investigated.
Foreclosure is a dilemma facing many homeowners. In some instances, a
foreclosure lawyer can negotiate a mortgage modification, but many people have been denied this option by their lender. They have the option of contesting a foreclosure in court with the representation of a
foreclosure attorney. But this can’t fully solve the housing crisis.
