Gallagher & Associates Team

Gallagher & Associates Team

Tuesday, November 30, 2010

Foreclosure Fund Proposed

A Federal Reserve official voiced approval Thursday for a fund that would compensate borrowers whose homes were improperly foreclosed upon.

Fed Governor Elizabeth Duke told a House subcommittee that she supports the idea, hich has been discussed in meetings between state attorneys general and banking-industry officials.

The committee hearing focused on allegations that major banks used flawed foreclosure documents to seize homes. The central bank and other banking regulators are investigating the issue.

"I think it would be very positive if there was a mechanism to deal with these problems as they came forward," she told the panel.

State attorneys general, who are conducting a separate investigation, are seeking a settlement with the mortgage industry that also would overhaul other industry practices, such as modifying loans for struggling homeowners.

Mortgage-operations officials from several of the biggest U.S. banks also testified. They promised to make every effort to keep people in their homes with modified loans, keeping foreclosure only as a last resort.

Officials from Ally Financial, Bank of America, JPMorgan Chase, Citigroup and Wells Fargo said they don't believe any document errors led to foreclosures that would not have occurred otherwise.

No comments:

Post a Comment