Big Banks Near Pact To Settle Alleged Abuses
Thursday, February 9, 2012
San Diego Union-Tribune --After months of painstaking talks, government authorities and five of the nation’s biggest banks — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — have agreed to a $26 billion settlement that could provide relief to nearly 2 million current and former U.S. homeowners harmed by the bursting of the housing bubble, state and federal officials said. California, with 2 million underwater borrowers, agreed Wednesday to sign the deal and would get $430 million.
It’s part of a broad national settlement aimed at halting the housing market’s downward slide and holding the banks accountable for foreclosure abuses.
While many economists say the moribund housing market as the greatest drag on the recovery, it isn’t clear how much the deal will help. “It will add another till to the mortgage market. It will make everyone more conservative in a time when we need to help the economy,” said Mark Reidy, executive director of the Burnham-Moores Center for Real Estate at the University of San Diego. “The only good thing is: Let’s get it behind us. I think California will have more leverage than the other states, so Californians may do better financially than everybody else … but it’s way too late.” (Full Story)