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13K Indiana foreclosure victims to get $2K checks

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Underwater Indiana homeowners will receive about $43 million in refinanced loans while other borrowers will get $30 million worth of loan-term modifications and other relief as part of a $25 billion nationwide settlement with the country's biggest mortgage lenders, Indiana Attorney General Greg Zoeller said Thursday.

The deal mends foreclosure abuses that occurred after the housing bubble burst, and requires five of the largest banks — Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial — to reduce loans for about 1 million households at risk of foreclosure and send checks to about 750,000 Americans who were improperly foreclosed upon.

As many as 13,000 Indiana borrowers whose homes were improperly foreclosed upon from 2008 through the end of last year will receive checks of $2,000 under the settlement with the federal government and 49 states, Zoeller said.

Overall, $97 million of Indiana's $145 million share of the deal goes directly to Indiana borrowers. The attorney general's office will receive a direct payment of about $45 million to fund consumer protection, state foreclosure prevention efforts and related programs, Zoeller said. Indiana's Department of Financial Institutions will receive an estimated $1 million.

The banks will have three years to fulfill the terms of the deal, which is subject to final approval by a federal judge.

"This resolution, while not everything we had wanted, speeds help to Hoosiers and for the economy as a whole," Zoeller said.

Loans owned by Fannie Mae or Freddie Mac are not affected by the settlement, which is the biggest involving a single industry since a 1998 multistate tobacco deal.

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  • Money to AG's office a waste
    I totally disagree with $45mil being given to the state Attorney General's office. That money is a waste. All of the money should go to help the homeowners & the people who were foreclosed on. Why such a big percentage to state govt? They'll get to start another agency staffed with people who have new-found power & don't care about the people they serve. As soon as the program was announced, I knew the states would end up with a huge chunk of the money for themselves that would just be squandered. Or maybe Mitch Daniels will just happen to "find" another big chunk of money that was "posted in the wrong section of the state's books."
  • Note to RG
    Actually, it was Greenspan who encouraged the elderly to refinance their homes, using their equity to boost the economy after 9/11. In addition, it was George Bush and Barney Frank who jointly suggested that everyone should hold a piece of the rock. It was the Bush Administration, namely Treasury Secretary Paulson who deregulated Wall Street and Lenders such as Countrywide, Washington Mutual, Wachovia, Bank of America, and Wells Fargo. When the TARP Bailout Proposal went to Capitol Hill in October 2008, Treasury Secretary Paulson asked for, and received, full immunity from future prosecution, dating back to his time as CEO of Goldman Sachs, the co-recipient of the initial $350 Billion Dollar Tarp Bailout Payment for Wall Street, back in October 2008. It was the US Treasury and the Federal Reserve, both controlled by the Bush Administration, that created sub-prime mortgages, starting in 2004. Many members of the House and Senate, on both sides of the aisle, benefited from home mortgage refinancing. Banks, appraisers, and realtors pushed people into home mortgages they had no business accepting, based on claims that the housing market would only get better. Average Americans did not create Credit Default Swaps, I think those creations happened on Wall Street. Spend some time at the library, you will be shocked by what your research brings forth.
  • what about Barney?
    While it is right and fair to punish the banks' for their wrongdoings, how is it fair NOT to punish those that got us into this mess to begin with (Barney Frank and his astute congressional colleagues - who are employed by us!) who FORCED THE BANKS to make (subprime) mortgage loans to people who they knew would never be able to pay them back?!!! And here again, our wonderful "Redistribution Administration" gives handouts to those who default on their financial commitments and gives nothing (except the promise of higher taxes and less personal freedom) to those who manage their obligations responsibly and ethically. November 2012 cannot come soon enough!!!!!!!

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  1. I'm a CPA who works with a wide range of companies (through my firm K.B.Parrish & Co.); however, we work with quite a few car dealerships, so I'm fairly interested in Fatwin (mentioned in the article). Does anyone have much information on that, or a link to such information? Thanks.

  2. Historically high long-term unemployment, unprecedented labor market slack and the loss of human capital should not be accepted as "the economy at work [and] what is supposed to happen" and is certainly not raising wages in Indiana. See Chicago Fed Reserve: goo.gl/IJ4JhQ Also, here's our research on Work Sharing and our support testimony at yesterday's hearing: goo.gl/NhC9W4

  3. I am always curious why teachers don't believe in accountability. It's the only profession in the world that things they are better than everyone else. It's really a shame.

  4. It's not often in Indiana that people from both major political parties and from both labor and business groups come together to endorse a proposal. I really think this is going to help create a more flexible labor force, which is what businesses claim to need, while also reducing outright layoffs, and mitigating the impact of salary/wage reductions, both of which have been highlighted as important issues affecting Hoosier workers. Like many other public policies, I'm sure that this one will, over time, be tweaked and changed as needed to meet Indiana's needs. But when you have such broad agreement, why not give this a try?

  5. I could not agree more with Ben's statement. Every time I look at my unemployment insurance rate, "irritated" hardly describes my sentiment. We are talking about a surplus of funds, and possibly refunding that, why, so we can say we did it and get a notch in our political belt? This is real money, to real companies, large and small. The impact is felt across the board; in the spending of the company, the hiring (or lack thereof due to higher insurance costs), as well as in the personal spending of the owners of a smaller company.

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