The Deadline for the Settlement Over Foreclosure Abuses

The deadline for the settlement between banks and the administration over foreclosure abuses has been set for 3rd February. The states will have to make up their minds by that date – to be in it or not be in it. The amount could be around $25 billion.

Officials from the state and federal government have been investigating the foreclosure operations of five of the major servicers of the country since the fall of 2010. The settlement is trying to give some relief to those who have been wrongfully foreclosed upon. Last week it was announced that this settlement would not relate to the issue of mortgage securitization.

In a letter of 27th January the Attorney General of Nevada, Catherine Cortez Masto written to the Department of Justice, HUD and Tom Miller the Attorney General of Iowa and the lead figure in these talks she has wanted more details of the approaching deal. She placed forth 38 questions and wanted speedy replies to measure the worth of the agreement because the deadline is near.

She wrote, “I need this information as soon as possible to allow my office to continue to evaluate the proposal on behalf of the state of Nevada”.

In 2010 all the fifty states had teamed up to investigate the matter after the exposure of the robo-signing scandal. The charge was that documents riddled with flaws were used to take over houses of families. But since then differences have risen between the attorneys general.

Joseph Smith commissioner of banks at North Carolina will be appointed to oversee that the banks abide by the conditions of the settlement according to an insider who remained anonymous because the news has not been officially been made public.

States are now weighing the matter – to sign or not to sign. At a conference attended by the attorneys general of the Democratic Party Miller did not make any comments about the deadline. Miller’s spokesperson Geoff Greenwood said, “We along with our federal partners are responding directly to Attorney General Masto to try to address her concerns”.

Apart from Masto the Attorney General of New York Eric Schneiderman and Attorney General of Delaware are having second thoughts about the settlement terms and are reluctant to give a broad release to the banks beyond the robo-signing issue. Biden said he would not sign on the present draft. The Attorney General of California Kamala Harris remarked that the settlement was “inadequate for California”.