Earlier this week, it was reported that a multi-billion dollar settlement appears to have been reached between some of the biggest mortgage lenders in the country and most states. Forty states are involved, including the state of Idaho. This settlement is an agreement for the big banks to allow states to protect consumers in the case that borrowers are mistreated. This is great news for the everyday borrower. It may lead to more mortgage lending and may infuse the economy with fresh cash.
Unfortunately, in this same report it suggests there are 10 states that haven't yet agreed to participate in this settlement. Some of the states not participating are Florida, New York, and California. With the big banks who have been targeted (Bank of America, Wells Fargo, JPMorgan Chase, Citigroup, and Ally) and the states not participating, it's been said that still 50% of the mortgages completed are not under protection from this settlement. This is unnerving.
Word this morning is that California and New York will join the other 40 states, pushing the settlement to $26 billion in the foreclosure settlement. This is yet another indicator that we may have seen the worst of the housing market crisis, and this might be a tactic that helps push our economy upward.