The Hill News

With great fanfare, the Obama administration and the state attorneys general recently announced the completion of what’s being touted as the largest consumer financial protection settlement in U.S. history. The country’s top mortgage servicers agreed to provide as much as $25 billion to help some past and current homeowners because banks regularly submitted foreclosure documents that were not properly reviewed or notarized (aka robo-signing).
 
At first blush, the settlement would appear to present an ideal opportunity for the market â€" paralyzed in part by the uncertainty over potential legal liabilities â€" to move ahead towards a much-needed housing recovery. In that regard, its completion was way overdue. In fact, by some accounts the statute of limitations on some of the abuses either had already or was about to run out.
 
While some will surely argue that the banks should be squeezed for more, the deal does provide some meaningful assi! stance for distressed and underwater homeowners. Mortgage servicers also agreed to a new set of standards to govern how they must work with homeowners moving forward who are at risk of foreclosure. It’s hard to take issue with a well-intentioned, bipartisan agreement between the legal authorities and the banks over admittedly shoddy mortgage paperwork.

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