For Idaho consumers, finding a way to resist increasing pressure to give up their homes may have found some support in the last week. It sounds like this agreement is about to be agreed upon by the parties involved.
As reported by the LA Times , "last week in Washington, representatives of the five major banks met with state and federal officials working on a settlement between the lending industry and state attorneys general from around the US.
The proposed settlement addresses damages from last year’s moratorium on foreclosure processing caused by “botched foreclosure” paperwork including robo-signing.
The proposal on the table would force banks to allow “severely delinquent homeowners” to sell their homes at short sale prices. Additionally, some mortgage servicers would be forced to reduce “the amount some homeowners owe on their loans”.
“The goal of short sales would be twofold: provide a quicker and more economical way for banks to dispose of distressed real estate and to help stabilize the real estate market by clearing out a backlog of defaulted mortgages that are poised for foreclosure”.
“They would be used in situations in which borrowers were so underwater that the more costly and time-consuming process of foreclosure would seem to be the only option”.
“The banks have given officials a counterproposal on some of the mortgage servicing requirements that includes a single point of contact for distressed homeowners, timelines for considering modifications, an online system for checking the status of applications and a third-party review of rejections, one of the officials said”.
Each state’s Attorney General will have to sign off on any agreed to settlement.
Iowa Attorney General Tom Miller is leading the negotiations. “Seven Republican attorneys general wrote that “the proposals go beyond resolving damages from foreclosure paperwork problems”.
I certainly hope that the short sale process is streamlined it would decrease the loss amount the lenders take on each property. Sellers will be more likely to stay in and maintain their homes until the time of the sale. More buyers would be willing to look at short sales if they were less hassle and lender were quicker with a response.
I will keep you updated once they have reached an agreement and we know effect on Idaho home owners.
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