Martha Coakley, state attorney general for Massachusetts, has high hopes for a settlement with banks to resolve the robo-signer fiasco and other foreclosure-related procedural flaws once and for all. Coakley describes her team’s goal “all along is to stop this flow of unnecessary foreclosures and clear up titles”. She believes that $25 billion could go a long way toward solving the crisis. Last week, the AGs presented lenders with a proposal that would require them to streamline mortgage modification processes, cut principals and pay up – to the tune of $20 billion. Now, though, in the face of lender opposition to modifications in large part because they fear modifications will only encourage more homeowners to default, many are rallying to demand that banks pay more in penalties. Protestors are rallying outside the AGs’ meeting location, bearing signs with slogans like “Send Bank the Bill”.
The main goal of the settlement is to resolve issues with uncertainty. Homeowners do not know if their foreclosures will hold. Many are hoping to either retrieve their homes from banks or receive settlement money. Buyers are afraid to purchase homes in light of title issues created by the robo-signer crisis. Although the robo-signer crisis did not impact the 27 states that do not route foreclosures through the courts, the uncertainty has extended to every housing market. Lenders and AGs alike hope that some type of settlement could resolve the issue once and for all.
Do you think that a settlement that is fair can be reached? How should the banks “pay the bill?”
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