There has been big publicity about the deal the Obama administration made with the banks and that was joined by all State AGs except Oklahoma (why are they the only smart people?). While the Federal government is hailing it as a great deal for people who have been foreclosed on or whose homes are underwater, most of the blogosphere seems to be saying that the only people who are going to win from this deal are the banks.
While no one apparently has seen the full agreement yet, it appears some facts can be determined:
- This settlement does NOT stop foreclosure proceedings. Foreclosure proceedings are expected to speed up. Banks are now set free from any future any law suit liability and will be proceeding aggressively with foreclosure activity.
- The banks have 3 years to settle on any and all cases. They will stall for an extended period of time if they are given the opportunity. You will need aggressive representation to push them along.
- Interest rate reductions / loan modifications are still at the discretion of the mortgage lender. Ultimately, you will need aggressive representation to complete any type of loan work out. Again, the mortgage lenders are off the hook for any future law suits.
- Only 1 out 11 home owners will receive a principal reduction. The only way to get to the front of that line is with proper representation.
Time will tell if this really does help home owners, but on the face of things, it appears to provide only minimal aid.





