The nation's biggest banks are offering to pay up to $5 billion to settle claims by federal and state officials of improper mortgage-servicing practices, but the federal and state officials are asking for more than $20 billion in penalties, according to people familiar with the situation, a report in today's edition of The Wall Street Journal said.
The article was written by Dan Fitzpatrick, Nick Timiraos and Ruth Simon.
Bank representatives met yesterday with state and federal officials in the latest round of negotiations and the size of the penalties is a key point of contention, the article said, adding that banks are "opposed to any broad-based write-down of principal balances, saying it will provide an incentive for borrowers to default" although they "intend to propose that as much as $5 billion be used to compensate any borrowers previously wronged in the foreclosure process and provide transition assistance for borrowers who are ousted from their homes."
The article said that "one idea is that foreclosure borrowers could receive several months of free rent once they find new housing."
The article was written by Dan Fitzpatrick, Nick Timiraos and Ruth Simon.
Bank representatives met yesterday with state and federal officials in the latest round of negotiations and the size of the penalties is a key point of contention, the article said, adding that banks are "opposed to any broad-based write-down of principal balances, saying it will provide an incentive for borrowers to default" although they "intend to propose that as much as $5 billion be used to compensate any borrowers previously wronged in the foreclosure process and provide transition assistance for borrowers who are ousted from their homes."
The article said that "one idea is that foreclosure borrowers could receive several months of free rent once they find new housing."
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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