Mortgage fix could be derailed by Obama’s new Financial Crimes Unit

TRD New York /
Jan.January 25, 2012 01:00 PM

Although an agreement on fixing the mortgage mess between state attorneys general and mortgage lenders was nearly crystallized, Obama’s new Financial Crimes Unit, revealed in the State of the Union address yesterday evening, could throw a wrench into the works, CNBC reported.

“This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans,” Obama said.

Now critics say the announcement of the unit will complicate talks with banks because their incentive to agree to a multi-billion dollar payout will be lessened if they know the federal government will be prosecuting them for securitization issues as well.

Mortgage rates are finally inching up, according to data from the Mortgage Bankers Association released today.

“We believe industry is worried that this new task force will go after the banks for the origination of many of the mortgages that have defaulted or are now underwater,” Jaret Seiberg, a financial services industry policy analyst, told CNBC. “Either way, this further adds to the litigation mess that is hurting the housing market by forcing banks to keep underwriting standards tighter than warranted.” [CNBC]


Related Articles

arrow_forward_ios
The number of mortgage borrowers in Covid-19 forbearance plans ticked down again this week. (iStock)

3M homeowners remain in forbearance

3M homeowners remain in forbearance
(iStock)

Older Americans increasingly saddled with housing debt

Older Americans increasingly saddled with housing debt
(Getty, iStock)

Mortgage applications to buy homes decline for fourth straight week

Mortgage applications to buy homes decline for fourth straight week
(iStock)

Black homeowners pay $13K more for home loans: study

Black homeowners pay $13K more for home loans: study
While some Americans have benefited from low mortgage rates, others find themselves locked out (iStock)

Homebuyers with bad credit increasingly locked out of the market

Homebuyers with bad credit increasingly locked out of the market
(Getty)

Has homebuying peaked? Mortgage applications sink 2%

Has homebuying peaked? Mortgage applications sink 2%
A new report by CoreLogic showed mortgage payments that are over 120 days delinquent rose to 1.4 percent in July, its highest level since 1999 (iStock)

Mortgage delinquencies jumped to highest rate in 20 years

Mortgage delinquencies jumped to highest rate in 20 years
Snapdocs CEO Aaron King (Snapdocs; iStock)

Snapdocs raises $60M amid record demand for mortgages

Snapdocs raises $60M amid record demand for mortgages
arrow_forward_ios

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

Loading...