Comments (16) | Add a comment
Housing settlement called 'just a beginning'
Tools
LAS VEGAS REVIEW-JOURNAL
Updated: Feb. 11, 2012 | 9:32 a.m.
The $1.5 billion that Nevada homeowners stand to receive from the $25 billion foreclosure abuse settlement with the nation's five largest mortgage servicers "is just a beginning, and not an end," state Attorney General Catherine Cortez Masto said Friday.
"(We've) been dealt a losing hand with the economic downturn," Masto said at a news conference in Las Vegas. "We have the highest foreclosure rate in the country. This (settlement) will help thousands of Nevada homeowners."
Citing figures from Irvine, Calif.-based real estate researcher RealtyTrac, Masto said one in 16 homes in Nevada was "hit with a foreclosure" notice, a dramatic difference from the national figure of one in 69.
"The recession has devastated every corner of our state. ... Over 60 percent of homes in Nevada are underwater," Masto said.
Before signing, Masto said Nevada won separate promises from Bank of America to set aside $750 million to reduce principal and facilitate short sales.
Bank of America will pay $30 million for state consumer protection programs, while the state will receive another $60 million for those efforts through the multistate settlement.
She said the $90 million will pay for additional staff on a task force investigating mortgage fraud and will go to nonprofit organizations and legal aid firms to help struggling homeowners.
Masto, who initially balked at the settlement, said she signed on after reviewing the agreement to "make sure it delivered adequate and immediate consumer relief." Masto said she wanted immediate relief for homeowners, and thinks she got it.
Nasser Daneshvary, director for the Lied Institute for Real Estate Studies at the University of Nevada, Las Vegas, said Nevada did well in getting $1.5 billion in the multistate deal covering Bank of America, JP Morgan Chase & Co., Wells Fargo & Co., Citibank and Ally Financial.
Daneshvary said that Nevada, with about 1 percent of the nation's population, will receive about 6 percent of the settlement funds.
"More importantly than that, we haven't given up any rights and can still pursue criminal and civil investigations" against the banks, he said.
Many homeowners will see reductions in mortgage principal. In Nevada, those who endured foreclosures probably will see checks averaging from $1,500 to $2,000.
Masto said those checks would be a small part of her work, and that she's not finished investigating the mortgage industry.
But some people have criticized the relatively small amounts that will go to individual homeowners and former homeowners.
"It's going to have very little effect," said Jeremy Aguero, principal with the research firm Applied Analysis in Las Vegas.
Aguero said homeowners in Clark County have lost $91 billion, $112,000 per home, in equity during the past four years. He said the $1.5 billion settlement pales by comparison.
Nationwide, some 11 million homeowners are underwater. Of the $25 billion settlement, about $17 billion will go to writing down 1 million mortgages.
"Overall, it's too little and doesn't make a big deal," Daneshvary said. "It's because 50 percent to 70 percent of the mortgages are owned by the government, Fannie Mae and Freddie Mac."
While federally backed mortgages held by the two agencies were not covered by the settlements, Daneshvary said he is hopeful the two agencies will reach similar settlements.
Masto in 2010 subpoenaed Fannie Mae and Freddie Mac seeking details about their role in the foreclosure crisis. On Friday she said she will continue to investigate both of the mortgage underwriters.
"It's the first step to stabilizing this problem," Daneshvary said. "This problem is so huge that the feds, states and banks can't fix it on their own, there has to be a combination of the feds, states and banks."
He said the real estate market ultimately must correct itself to "stop the bleeding."
Masto stressed that the settlement will not prevent her office from pursuing additional cases against the five banks or curtail ongoing civil and criminal cases. She said her office is investigating 306 companies, which average 100 to 150 complaints per company.
Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.
Comments
Terms & Conditions
The following comments are provided by readers and are the sole responsiblity of the authors. The Review-Journal does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please use the Report Abuse button.
Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 24 hours. Please do not submit a comment more than once.
Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background.
RSS
Twitter
Facebook
He promised Millions and millions of jobs not millions and millions of freeloaders. promised prosperity not $trillions and $trillions of debt,. better education??? many will graduate soon and can`t find a job with all the education received in universities. His motto, Talk loud and carry a big debt, leave the country in shambles as he rides of in to the sunset.
Marxist at work. soon there will be a statue of Lenin looking down on the Nut house called the white house. middle class tax payers lose , the flakes and the politicians win. Obamanomics at it`s best.
govt raiding of banking is doing nothing but ensuring no more mortgages will be issued. banks make money from 0% Fed money now, good for them.
Borrowers who: (1) obtained conservative mortgages (<80% LTV) and (2) stayed current (never defaulted) despite being increasingly upside down due to the Borrowers who defaulted are the ONLY people damaged (lost money), yet are still ignored. REFINANCING? Even with refinancing of debt that exceeds property value, the borrowers who defaulted may still win in the end as they are not upside down! To make matters worse, Government refinancing programs, such as HARP1, is financially HARMFUL to borrowers who must pay upfront FEES (non-refundable) and pay tens of thousands of dollars to resolve any gap btwn existing loan balance and refinance amount. HARP2 removes refinance limit, but the honorable borrower is still upside down (loan > property value)! GOVERNMENT GETTING RICH. In regard to the AG settlements, the States keep most of the shakedown money for themselves. REAL SOLUTION IGNORED. Years ago, Govt programs should have reduced Principal in phases to borrowers who stayed Current (never defaulted) on mortgages obtained from 2004-2007 (high point of boom). That would have avoided most or all defaults and real estate values would have been more stable and thus the economy. ADS. radio ads now offer "credit restoration" to those with foreclosure or short sale on record. So the FICO system has no integrity? TV ads say STOP paying your mortgage if upside down. Those who pay their mortgages are mocked as fools.
Why isn't Clown Masto (D) sueing Bill Clinton (D) - Barney Frank (D) Head of House Finance Committee - Chris Dodd (D) Head of Senate Finance Committee - Harry Reid (D) Senate Majority Leader ?????? The "ENTIRE CLOWN LIST" above pressured and required banks to give mortgage loans to people who couldn't afford them (one more DemocRAT way of buying votes with other people's $$$$$) - Now Fannie + Freddie (you and me the taxpayer) are holding 70% of all mtg. loans. -------------------------------------------------------------------------------------------------- Blame the other guy. As Dirty Old Senile Harry Reid continues to say to this day ---- "YOU DON'T THINK I HAD ANYTHING TO DO WITH THIS MESS, DO YOU ?????" -------------------------------------------------------------------------------------------------------------- No Harry, we believe you, because we are all "STOOOOOOOOOOOOOOOOOOOOOOOOOPID".
money for what ..the familys home is gone ...too late ..THIS IS LIKE GOING ON THE PILL AFTER YOU FIND OUT YOUR PREGNET ..
not voting for anyone in office would be a begining .for nevada and our country
voting obama out of office will be a begining in november
SOCIAL JUSTICE! This is a teachable moment as Obama and his mindless drones say. AG Cortez Masto simply has her hand out like any good democrat does seeking free money from bankrupt policy that originated under democratic rule. 1992 Community Reinvestment act started all of this non-sense. It took only 14 years for this cancer to manifest itself into a nightmare for taxpayers. Democrats defended FNM & FRE creating internal policies that leaad to anyone who could sign a document getting a loan. Wait till you see what Obama's health care bill does to you! Health & Care are not what willc ome out of this. Dodd, Frank anyone? Do some research there and then ask why Chris Dodd and Barbey Frank were behind this disaster! wonder why niether is in congress anymore? Time to Wake Up?
$25 billion extorted from the banks to give to people to help with their failing mortgage. BRILLIANT! Does anyone think the banks will let that amount of money go uncollected? Expect more and faster foreclosures this year as banks recoup their losses. Value of housing will plummet more. Feds announced no interest rate increase until late 2014 maybe. Why would anyone buy a house now when the bottom is still a long ways off and interest rates have no threat of rising for another 2 years? Only an inexperienced community organizer would come up with this tomfoolery.