The Good News on Foreclosure Compensation Fund

The Good News on Foreclosure Compensation Fund

There is a reason for homeowners whose homes were foreclosed with unjustified reasons to celebrate. A good Samaritan has come to give her blessing on the funding proposed to compensate borrowers whose homes were improperly foreclosed upon.

Fed. Gov. Elizabeth Duke has expressed her approval for this fund, which has been under the discussion of state attorneys general and banking industry officials.

Allegations involving major banks, regarding erroneous foreclosure documents, have been investigated. The hearing of the case involved the central bank and other banking regulators.

Duke insists in dealing with the issues using tools that would lead to its resolution as it comes. This, she thinks, would positively address the issues.

In a separate probe, the state attorneys general sought to change mortgage industry practices. This includes modifying procedures for homeowners who are having trouble with their loans.

Problems with documentation will not only affect the financial system and borrowers, but will eventually become a problem of banks too. Issues on documentation may mean a huge cost for banks.

Homeowners may just have security in keeping their homes through the revised loan procedures promised by mortgage operations officials of banks. The revision shall keep foreclosure as their last resort.

The CEO of mortgage operations at Ally Financial Inc., Thomas Marano, expressed his regret on the discrepancies and said they have put all efforts to fix everything.

Officials from the bank of America Corp., JPMorgan Chase and Co., Citigroup Inc. and Wells Fargo & Co., expressed disbelief that any discrepancy in the documents would have led to foreclosures.

Rep. Maxine Waters, head of the Financial Services housing subcommittee, secured affidavits from bank employees disclosing that documents and notarizations were inaccurate. Foreclosures were not based on any manual. Walters also noticed that problems were not immediately detected by bank officials.

Waters expressed disappointment over the regulators' attitude towards the issue. On a statement addressed to John Walsh whose agency oversees national banks, she expressed that she has not seen any sincere action that would show concern to homeowners.

With this, Walsh defended that banks has modified its program with regards to housing loans. Troubled borrowers will find themselves assisted as the quality of programs has been improved.

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