8 Facts for Homeowners to Know about the Government’s Mortgage Deal with the Banks
Since the housing bust, the biggest problem facing Nevada homeowners is what to do about their negative equity in their underwater houses. One option is to consult with a Las Vegas bankruptcy lawyer at Freedom Law Firm to see if bankruptcy will work. In the good news department, the federal government along with 49 state attorneys general struck a deal with lenders to aid homeowners with obtaining mortgage principal reductions. The New York Times provides some facts worth knowing about the agreement.
(1) The settlement is $26 billion from the banks earmarked to aid homeowners in some way or another. That number might rise to $32 billion if other large lenders join the deal.
(2) $17 billion will go to restructure existing mortgages, $3 billion to refinancing, $1.5 billion will compensate victims of wrongful foreclosures, $2.8 billion to state governments and $1.8 billion to the federal government.
(3) Victims of wrongful foreclosures will receive $1,800 to $2,000 on average.
(4) The agreement only applies to loans currently owned by banks, such as Bank of America, Wells Fargo, JPMorgan Chase, Citigroup, and Ally. Bank of America.
(5) Most of the settlement funds will go to Florida and California because that’s where most of the country’s underwater homes are. It’s unclear how much will go to Nevada.
(6) Importantly, if the banks committed fraud in the process of originating the loans, they government may still pursue them, so this is not complete amnesty.
(7) The settlement will be executed over the course of three years, and with $699 billion in negative equity nationwide, it can’t possibly help all homeowners substantially.
(8) The plan does more to help those who are still in their homes than it does those who have already suffered a foreclosure.
This plan does some good things for homeowners, but it’s long overdue. Anyone who already used the legal system to remedy their underwater homes faced the full consequences while those who remained in their homes might not. Moreover, the plan cannot possibly result in everyone’s homes returning to positive equity. Consequently, even if you are eligible for relief via the agreement, it’s likely worthwhile to consult with an experienced Las Vegas bankruptcy attorney to consider all your options.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 702-745-8327 to set up your free consultation.