Opinion: foreclosure

Thứ Sáu, 10 tháng 2, 2012

The $26 billion foreclosure fraud settlement: By the numbers

The government and big banks strike a deal over alleged foreclosure abuses. Where will the money go?

After months of difficult negotiations, government authorities announced Thursday that they have reached a $26 billion settlement with five of the nation's biggest banks over their flawed and fraudulent foreclosure practices. The deal is intended to help troubled borrowers by lowering their mortgage rates and the amounts they owe on their homes. It also will provide restitution to people hit by mortgage-related abuses, such as the "robo-signing" of documents to speed up foreclosures. Who will the deal help, and how much relief will they get? Here, a brief guide to the settlement, by the numbers:

$26 billion
Total value of the settlement

SEE MORE: Short sales: The answer to America's housing crisis?

$30 billion
Value of the deal if nine more mortgage-servicing institutions sign on to the settlement. To date, it just involves Wells Fargo, Bank of America, J.P. Morgan Chase, Ally Financial, and Citigroup

$17 billion
Relief earmarked for homeowners. The money will go toward lowering mortgage balances for people who are "underwater" — meaning that they owe more on their mortgages than their properties are worth

SEE MORE: Obama's mortgage plan: Who really benefits?

$20,000
Approximate average reduction in each loan's principal

2 million
Underwater homeowners who could be helped under the settlement

SEE MORE: The 12-year-old who saved his grandmother from foreclosure

$700 billion
Total outstanding mortgage debt on the nation's underwater properties

$50,000
Amount those homeowners are underwater, on average

$3 billion
Relief that will come in the form of refinancing so that borrowers who are current on their mortgages, but underwater, can lower their payments by refinancing at today's historically low rates

$1.5 billion
Money earmarked as restitution to those who have lost homes to foreclosure

750,000
People who have lost their homes to foreclosure between January 2008 and the end of 2011 who will be eligible for payouts under the deal

$2,000
Average payment those people would receive

4 million
Americans who have been through foreclosure since early 2007

49
States that have signed on to the settlement. The lone holdout is Oklahoma.

$250 billion
Size of the tobacco settlement, a similar agreement between government and corporations, struck in the 1990s

Sources: Business Insider, NY Times, Think Progress, Wash. Post

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The 12-year-old who saved his grandmother from foreclosure

A tween do-gooder turns the focus of his charitable "Dream Catcher Network" to a cause that's awfully close to home

Noah Lamaide is not your average 12-year-old. Since he was 9, the Wisconsin boy has been active in community service, largely inspired by his grandmother, Janice Sparhawk, who has served as a foster parent to hundreds of local children. When foreclosure threatened his grandmother's century-old house recently, the young altruist leapt into action. Here, a short guide to this unusual story:

What exactly happened?
After taking out a 2010 loan to put a new roof on her circa 1900 home, Janice Sparhawk, 72, fell behind on the mortgage payments. Eye surgery and complications from asthma forced Sparhawk out of work, making it more difficult for her to pay back what she owed. Her home, which had been in the family for three generations, was slated for auction on Feb. 15, 2012.

SEE MORE: Obama's mortgage plan: Who really benefits?

And her grandson came to the rescue?
He sure did. With his mother's help, Noah had previously set up a website, Noah's Dream Catcher Network, to promote his various charity projects. On Jan. 5, the boy refocused the site to raise money to save his grandmother's home. "My Grandma, in case you don't know her, has a heart of gold," he wrote on the site. "If I have 400 friends give $25.00 I can give her her home back for Valentines Day!!!" Donations poured in from all over the country, and within a month, Noah had raised $10,500. On Monday, he signed checks over to the local bank, allowing Sparhawk to stay in her historic house.

And Noah has a history of charity?
Yes. When he was 9, Noah's mother challenged him to do one community service project each year. Rather than just completing a few hours of volunteer work here and there, Noah focused his efforts on raising money for food banks, or sending a family friend with cancer on vacation. Some years, Noah even gave up his birthday presents so he could make contributions of his own.

SEE MORE: Short sales: The answer to America's housing crisis?

Sources: ABC News, Consumerist, The Huffington Post

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