With nearly half of all Miami homeowners underwater on their mortgages, it’s no wonder Floridians remain among the most skeptical of a recent $25 billion settlement between the banks and U.S. government.
The goal of the settlement was to help address some of the most egregious abuses by banks, and particularly those that led to the housing burst that has so many struggling with a foreclosure in Miami. As we have written about previously in our Miami foreclosure blog, the settlement is supposed to ease the burden on some of the hardest-hit Americans, as well as serve as a penalty for banks whose greed knew no depths, ultimately resulting in a global recession.
Miami foreclosure attorneys have already labeled this settlement a “sweetheart deal,” which is of little benefit to consumers. Now, we have discovered there is even more reason to be suspicious.
According to Reporter David Reilly of The Wall Street Journal, the actual details of the settlement have so far been held up from public release, with banking and government officials saying the deal should be filed in court within the next several weeks.
Government officials came out strong in their announcement of the deal a few weeks ago. They played up the fact that attorneys general from 49 states had signed off on the deal. They heralded the fact that mortgage rates will be reduced for about 1 million homeowners, who scramble to make monthly payments that are more than the home is worth. They even touted the fact that about 750,000 heads of households that were improperly foreclosed on will receive a $2,000 restitution payment.
Never mind that the latter won’t cover the cost of first month’s rent and security deposit for a homeowner who was forced to downsize.
Never mind that having your mortgage reduced now isn’t going to suddenly spring these people from the debt they have been accruing for years, while bankers lined their fat pockets.
And never mind that while $25 billion may seem like a decent chunk of change, it is little more than a drop in the bucket to these banks, meaning there is little incentive for them to halt the practices that led to these massive issues in the first place.
Now, the government and the banks are dragging their feet on releasing an actual copy of the deal. As Reilly put it: “The devil will be very much in the deal’s details.”
We’ll give them this: It is a very complex situation that involves a great many parties. But without the ability to pore through the actual documents, neither taxpayers nor investors are going to have a real handle on what the banks received or what the various government agencies doled out, in return for this $25 billion.
According to Reilly, one of the most crucial aspects of the deal will be to what extent the banks are going to be able to skirt any future litigation resulting from these mountains of abuses. Officials may have talked up the fact that this deal will prevent any future abuses, we don’t know how firm those promises are unless we can see the exact terms of the settlement.
Make no mistake about it, struggling homeowners are still best served by turning to a Miami foreclosure defense attorney for help.