| the deal announced that will allow mortgage servicers to pay $3.3 billion to borrowers who went through foreclosure in 2009 and 2010 and an additional $5.2 billion to reduce the principal is far too modest to be a credible deterrent to reckless foreclosure practices.
"Those numbers might look impressive, but the deal is far too modest to be a credible deterrent to reckless foreclosure practices.... A year later, it's clear that the settlement hasn't worked as planned. Banks have dragged their feet in modifying first mortgages, much less agreeing to forgive part of the principal on homes that are underwater... It has allowed banks to push homeowners into short sales, an alternative to foreclosure whereby the distressed homeowner sells the property for less than the debt that is owed but as a matter of social policy, the program has failed to keep people in their homes." |
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