States prepared to give banks immunity in mortgage abuse settlement

TRD New York /
Oct.October 18, 2011 06:24 PM

Discussions between the states and banks on mortgage abuses are
nearing an agreement, Reuters reported.

Under a proposed settlement — which could total $25 billion — banks
would get broad legal immunity from state lawsuits in exchange for
refinancing underwater borrowers’ loans, sources said.

The deal could provide some relief to the U.S. housing market and
clear up some uncertainty over banks’ legal exposure to bad mortgages that has hurt
their stock prices, according to Reuters. Banks had been holding out on a
multi-billion-dollar settlement because they wanted broader legal
immunity than state attorneys general were prepared to offer.

While state AGs had originally only considered granting immunity for so-called
“robo-signing” of documents to evict people behind on their mortgages,
in recent days, the state attorneys general agreed to release major
banks from claims that they made legal errors when first originating
the loans, such as approving loans for borrowers without verifying any
income, according to two people familiar with the talks. In exchange,
banks would agree to refinance mortgages for borrowers who are current
on their payments but owe more than their homes are worth,
the sources said.

New York Attorney General Eric Schneiderman was removed as a leader of the panel negotiating with the banks because he opposed possible immunity.
[Reuters]


Related Articles

arrow_forward_ios
(Getty, iStock)

Hudson’s Bay, Simon Property Group hit with $846M foreclosure lawsuit

Hudson’s Bay, Simon Property Group hit with $846M foreclosure lawsuit
Citizens Bank CEO Bruce Van Saun and SL Green CEO Marc Holliday with 106 Spring Street (Getty; Sl Green; Google Maps)

One of Soho’s priciest retail spaces heads to foreclosure

One of Soho’s priciest retail spaces heads to foreclosure
Senator Mitch McConnell and House Speaker Nancy Pelosi (Getty)

$2.2T House stimulus package would ban evictions for 12 months

$2.2T House stimulus package would ban evictions for 12 months
Governor Andrew Cuomo (Getty; iStock)

Commercial evictions, foreclosures halted through October

Commercial evictions, foreclosures halted through October
Tillary Hotel at 85 Flatbush Avenue (Image via Kutnicki Bernstein Architects)

Isaac Hager’s Downtown Brooklyn hotel heads to foreclosure

Isaac Hager’s Downtown Brooklyn hotel heads to foreclosure
A million homeowners haven’t requested forbearance on their mortgages — and are now at risk for foreclosure and eviction. (iStock)

1M struggling homeowners didn’t request forbearance. Now what?

1M struggling homeowners didn’t request forbearance. Now what?
U.S. foreclosure filings in August jumped 11% as some states ended relief measures, though continued government intervention has prevented sharper increase (iStock)

US foreclosure filings jump as some states end relief measures

US foreclosure filings jump as some states end relief measures
FHFA director Mark Calabria (Getty; iStock)

Fannie and Freddie extend eviction, foreclosure moratorium

Fannie and Freddie extend eviction, foreclosure moratorium
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...