Property owners which were wrongfully foreclosed on by financial institutions in the robosigning scandal could be paid back, as 14 large mortgage lenders have been required to pay these individuals back by the government. Though the people who have had to endure this injustice can be repaid, the exact number of people who were foreclosed on without having done anything wrong is not known yet.
Financial institutions paying homeowners
In the robosigning scandal, there were difficulties where paperwork was signed and sent through the system without doing the proper checking of facts which now, federal regulators and financial institutions have come to a settlement about. The financial institutions that wrongly foreclosed on homes have to pay back the victims as part of the agreements, Reuters states. USA Today states the 14 corporations involved were Ally Financial, Aurora Bank, EverBank, HSBC, Sovereign Bank, SunTrust Banks, MetLife Bank, OneWest Bank, and PNC, U.S. Bank, Wells Fargo, Bank of America, JPMorgan Chase, Citigroup and subsidiary Citibank. There will even have to be payments made by loan service businesses MERSCORP and Lender Processing Services. Soon, affected homeowners could be contacted. Arrangements can then be made.
Total fallout to be determined
The numbers of people that need to get paid or the fines that can be placed have not been added together yet. Government officials like the idea of giving a $20 billion fine to the financial institutions. The settlement is only with the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Reserve. Other settlements with other federal agencies are nevertheless pending also as every state attorney general in the nation.
Mortgage costs to go up
The regulation and legislation are being increased for financial institutions. That means property owners have to worry about increase mortgage costs. New Federal Reserve rules on mortgage officer compensation, according to MarketWatch, may cut into commissions for loan officers. Mortgage brokers and loan officers at lending institutions can’t receive a commission depending on the interest rate at which a mortgage is lent at any longer, which analysts predict will eat into profits. The Center for Responsible Lending, a consumer advocacy group that has endorsed reform of financial products from mortgages to payday loans, insists that costs to customers won’t go up, however decreasing revenues are typically passed to customers in the form of increased costs.
Information from
Reuters
reuters.com/article/2011/04/13/us-financial-regulation-foreclosures-idUSTRE73C3DV20110413?pageNumber=1
USA Today
usatoday.com/money/economy/housing/2011-04-13-wrong-foreclosures-repay.htm
MarketWatch
marketwatch.com/story/home-loan-brokers-face-new-limits-on-pay-2011-04-11
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