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February 16, 2012

Deal reduces legal uncertainty for lenders and gives morsel of hope to real estate markets

Filed under: Uncategorized — netmobil @ 11:13 pm

Just got back to Scottsdale from Big Bear, time to blog about real estate. Bigwigs from Bank of America, Wells Fargo, JP Morgan Chase, Citi, and Ally were called to HUD headquarters and told they weren’t leaving the room until they came to an agreement on a housing settlement. Consumer Financial Protection Bureau founder Elizabeth Warren, the Secretary of the Department of Housing and Urban Development, and President Obama and his administration were some of the key players in securing some measure of relief to distressed mortgage holders. I know the Big Bear and scottsdale real estate markets as well as Arizona luxury homes market including high end properties like golf course and country clubs have been hit hard overall, including many medium level homes for sale in scottsdale as well.
The agreement that entails $25 billion in financial relief to assuage outrage over foreclosure abuses is certainly an historic achievement but will not cure the stricken market. It will, however, buy the lenders a guarantee that they will not be subject to lawsuits by federal agencies or 49 states attorneys general who signed onto the deal. What it will not do is protect the banks from suits brought by consumers, even those who partake of the settlement money. In addition to Scottsdale, Arizona I have noticed that the Big Bear real estate has been affected as well.
At the same time, the federal government made an agreement to accept $1 billion in fines from Bank of America to address charges of falsified claims submitted to process loans.
The best news may be that the agreement includes new standards with independent monitoring to ensure proper protocols for dealing with borrowers with distressed mortgages.

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