Thursday, October 18, 2012

Another white lie

When states received $2.5 billion from big banks in a mortgage-foreclosure settlement earlier this year, the expectation was that most of it would be used to aid distressed homeowners. But so far, less than half of the money has been designated for that cause—with much of the rest going to help close state budget gaps, says a report scheduled for release Thursday.

In March, 49 states reached a $25 billion settlement with five of the nation's largest mortgage lenders over charges that they had improperly processed foreclosures.

The agreement allowed the banks—Ally Financial Inc., Bank of America Corp., BAC +0.05% Citibank Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co.—to pay $20 billion of the settlement in the form of relief to distressed homeowners.

As I've said, there is no one helping the average homeowner, it's all smoke and mirrors.

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