This might explain why the final terms of the government’s $25 billion mortgage settlement with five big banks hasn’t been filed yet. More than a week after the settlement was announced, the official website set up by the Justice Department still has a “coming soon” sign by the link for the settlement papers.
As I wrote earlier in the week, the long delay without a signed document raises concerns that the terms of the deal could be changing. Under those terms, as described by the Justice Department and the attorneys general for the 49 states involved, the banks agreed to pay $5 billion in fines and to reduce mortgage payments and loan balances for distressed borrowers by anywhere from $20 billion to $35 billion.
Today, the Financial Times reported this little gem. It seems that taxpayers are expected to subsidize the settlement. As the FT reports:
A clause in the provisional agreement – which has not been made public – allows the banks to count future loan modifications made under a 2009 foreclosure-prevention initiative towards their restructuring obligations for the new settlement, according to people familiar with the matter.
Read the rest of the article at the Houston Chronicle
No comments:
Post a Comment