Fourteen Banks To Pay Back Property Owners Back For Wrong Foreclosures

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Homeowners which were wrongfully foreclosed on by financial institutions in the robosigning scandal could be paid back, as 14 large mortgage lenders have been required to pay these individuals back by the government. Those individuals which were foreclosed on without having deserved it will be compensated. Post resource – 14 banks ordered to pay homeowners back for bad foreclosures by MoneyBlogNewz.

The price financial institutions must pay

A settlement over the robosigning that happened has been reached by federal regulators and the financial institutions. The robosigning incident was when there were many putting paperwork through without checking any of the facts first. Reuters reports the homeowners who were foreclosed upon wrongly will get money. The financial institutions will pay them back. There were 14 businesses in all, according to USA Today, including lending companies Ally Financial, Aurora Bank, EverBank, HSBC, Sovereign Bank, SunTrust Banks, MetLife Bank, OneWest Bank, PNC, U.S. Bank, Wells Fargo, JPMorgan Chase, Citigroup, Bank of America and subsidiary Citibank. Loan servicing businesses MERSCORP and Lender Processing Services have also been ordered to pay back improper foreclosures. Soon, affected property owners can be contacted. Arrangements can then be made.

Not sure what total fallout will end up at

The numbers of people that need to get paid or the fines that could be placed have not been added together yet. Government officials like the idea of giving a $20 billion fine to the banks. To further add to the headaches of these institutions, this is only from the settlement with the Federal Reserve, the Office of Thrift Supervision and the Office of the Comptroller of the Currency. Every state lawyer general nevertheless has settlements pending along with federal agencies.

Bottom of mortgage costs hit

The regulation and legislation are being increased for financial institutions. That means homeowners have to worry about increase mortgage costs. There were new rules added on mortgage officer compensation by the Federal Reserve. This means that loan officers will lose commission, states MarketWatch. Most institutions are no longer giving out commission depending on rates of interest on the mortgages. That means a lot of profit could be lost. The Center for Responsible Lending, a consumer advocacy group that has endorsed reform of financial products from mortgages to payday loans, insists that costs to consumers won’t go up, but decreasing revenues are typically passed to consumers in the form of increased costs.

Articles cited

Reuters

reuters.com/article/2011/04/13/us-financial-regulation-foreclosures-idUSTRE73C3DV20110413?pageNumber=1

USA Today

usatoday.com/money/economy/housing/2011-04-13-wrong-foreclosures-repay.htm

MarketWatch

marketwatch.com/story/home-loan-brokers-face-new-limits-on-pay-2011-04-11

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