Tags: Mortgage | Deal | Borrowers | Shelby

U.S. Mortgage Deal Should Aid Wronged Borrowers, Shelby Says

Tuesday, 28 February 2012 12:30 PM

U.S. Senator Richard Shelby questioned the fairness of a $25 billion mortgage servicing settlement, saying it “appears to come up short” for borrowers who wrongfully lost their homes.

The top Republican on the Senate Banking Committee spoke at a hearing today on the state of the housing industry.

Earlier this month, five banks agreed to pay at least $25 billion to end a nationwide investigation of abusive foreclosure practices after the collapse of the housing bubble.

Homeowners who were improperly foreclosed will receive about $2,000, Shelby said in his opening remarks.

“Although having the settlement compensate as many people as possible may make sense politically, settlement funds should compensate homeowners who suffered actual harm and deter future violations of law,” the Alabama senator said.

“Homeowners who were wrongfully foreclosed upon will still likely have to pursue the remainder of their claims in court or through financial regulators,” Shelby said. “In contrast, many homeowners who suffered no legal harm appear to be eligible for compensation as well.”

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Tuesday, 28 February 2012 12:30 PM
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