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Koster: Mortgage Settlement Not Good Enough

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St. LOUIS, Mo. (KMOX) – Missouri is entitled to nearly two hundred million dollars under the national mortgage settlement. Attorney General Chris Koster says it’s a good start, but probably won’t be enough money to help everyone hurt in the mortgage crisis.

“No agreement is perfect and the question is, is this enough money and the answer to that is probably no, it doesn’t fully cover what has occurred here or the damage to the economic system.”

This agreement was with the top five banks in America, and Koster says the next step is to work with the next ten. He anticipates more money will become available from those banks later. Missourians who have been foreclosed on between January of 2008 and the end of 2011 are entitled to 2 thousand dollars. There is also assistance available for those who are underwater on their mortgages.

Illinois, which had more foreclosures than Missouri, is getting close to a billion dollars in this agreement but Rob Palmer, policy director for Housing Action Illinois, says  that’s not enough.

Palmer says  it’s good that the settlement requires lenders to try loan modification and refinancing before foreclosure. Certain homeowners also will be eligible for principle reduction, if their “underwater” status is what’s preventing them from refinancing.

Much of the settlement will be principal reduction, which Palmer points out is money that the banks were likely to lose anyway, and Palmer says it doesn’t much help people who lost their homes to foreclosure in the early years of the housing crisis, and who are still carrying the economic wounds from that. They can get up to $2,000 each.

The settlement is with banks that robo-signed foreclosure documents. The settlement applies only to robo-signing fraud; the banks are still subject to criminal and civil liability for anything else they’ve done wrong, if anything.

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