Mortgage Relief “Closer Than Ever”?

Housing has been in the national headlines a lot frequently.  Something we’re going to hear much more about (hopefully) is a settlement between the government and major banks for a string of abusive lending and foreclosure practices.

Some of the worst practices were getting lower-income buyers into high-risk mortgages.  So, these buyers would be barely making payments in regular times; now consider what the economy’s been like over the last six or seven years.  Another unsavory practice was aggressively pursuing foreclosure against homeowners that fall behind on mortgage payments (even after banks worked so hard to get people into homes they shouldn’t have been able to afford).

A settlement of $25 billion, though seemingly large, will equate to about $2,000 for everyone who lost a home to foreclosure.  I can’t imagine what it feels like to lose your home, but somehow $2,000 doesn’t seem like much consolation.  As my friend Erin pointed out to me, the biggest banks paid executives over $144 billion in bonuses (2011 alone).  I guess compensation is a matter of perspective?

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3 thoughts on “Mortgage Relief “Closer Than Ever”?

  1. […] piece that outlines key shortcomings of the controversial mortgage settlement.  I posted about the initial deal awhile back, and then again expressing my general disappointment.  If you’re wondering why […]

  2. […] a good example of how housing markets respond to “shocks.”  The most recent shock, the mortgage crisis, shifted a lot of prospective homebuyers to put off the task of purchasing a home, instead opting […]

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