Let’s take a quick look at the National Mortgage Settlement that was passed last week.
The National Mortgage Settlement is a $25 billion dollar settlement passed by the federal government and 49 (not in Oklahoma) of the 50 states. Five banks are involved (Bank of America, JPMorgan Chase, Ally Financial, Citigroup, and Wells Fargo) The whole idea behind it is to help reverse the effects of bad loans and the issues created in the foreclosure process.
Here’s where the money is headed:
– $3 billion to a National Underwater Mortgage Refinancing Program. This will help those who are current on their payments but owe more than their homes are worth.
– $5 billion in payments to both State and Federal Governments. Some of this money will eventually be split and end up in the hands of people who lost their homes to foreclosure to one of these 5 banks.
– $17 billion to foreclosure relief efforts. This is a minimum amount to be given collectively by the listed 5 institutions to help short sales, principle reduction, homeowner transition programs, and other programs.
We will talk about the impact the settlement will have in a future post but for now…what are your thoughts?