Home Foreclosure News of the Day: Banks FINALLY Considering Writing Down Principal Balances – Because They Were Forced to By This

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Boy if banks would just do things because “it’s the most sensible thing to do,” instead of having to be forced into a corner, the foreclosure crisis could probably have come to an end already – or be close to it.

What are we talking about?

Specifically about banks writing down principals on homes so that many homeowners facing foreclosure could keep them. We’ve been screaming that they should do this on this blog for months now, ie:

Foreclosure Crisis Deepens Yet Again: The One Thing Lenders Won’t Do That Could Significantly Decrease Foreclosures Immediately

Foreclosure Homes for Sale: Banks Prolonging the Crisis?

Well now, it looks like they’re finally ready to play this kind of ball. But, it’s not because they came to their darned senses, it’s because Attorney Generals from all 50 states started investigating their behinds and levying huge fines. Remember last fall when many banks halted foreclosures, and some lenders were fined because of illegal home foreclosure practices?

Hit’em in the wallet – that gets’em every time!

Stopping Foreclosure: Why Banks are All of a Sudden Willing to Reduce Principal Balances

As mentioned above, according to the Bloomberg.com article, Bank of America Said to Be Seeking Separate Mortgage Foreclosure Deal, it’s because:

Attorneys general from all 50 states began investigating the practices last year to determine whether banks and loan servicers used faulty documents to justify foreclosures. . . . The probes by the attorneys general and federal regulators began amid allegations of practices such as robo-signing, or using workers with little or no training to sign thousands of documents filed in support of foreclosures without reading them. The investigations were broadened to include all aspects of the servicing business.

When you have Attorney generals from all 50 states up your arse – and they start looking at EVERYTHING (eg, “all aspects of your mortgage servicing business”), it’ll make ya play a little ball, don’tcha think?

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Stopping Foreclosure: Who Should the Average Joe Homeowner be More Angry with — Banks or Lawmakers?

I don’t know who to be more mad at though – the banks for being so friggin’ hard headed, or the government for dragging its feet so long. And of course, le’s not forget ourselves. Many homeowners simply got in over their heads, purchasing homes they knew good and got-darned well they couldn’t afford. But what’s done is done now and we’re all having to pay the piper.

And, even though the deal may still fall apart, a least it’s got lenders on the right track in helping to end the foreclosure crisis.

Lord, lord, if only they had enough sense to do all of this three or four year ago. How many homeowners would still be in their homes, and how many more could have saved some value (eg, not be so severely underwater).

But, the wheels of justice always seem to turn slow for the Average Joe homeowner; we can only be grateful that they do, indeed, turn.

Related Posts

Home Foreclosure Question of the Day: Should Lenders Write Down Principals to Help Homeowners Keep Their Homes

Home Foreclosure News: Should the Government Intervene or Let the Market Take Care of the Home Foreclosure Situation?

Could Recent Mortgage Law Challenges Mean More Homeowners Won’t Face Foreclosure and/or That They Were Illegally Foreclosed On and Can Keep Their Homes?

Stopping Foreclosure: Banks Considering Giving Principal Reductions, Permanent Modifications & More to Prevent Foreclosure for Many Homeowners

Home Foreclosure News of the Day: The Main Sticking Point Now for Banks Settling on How Much to Pay for Robosigning & Other Illegal Home Foreclosure Tactics

Home Foreclosure News of the Day: New Requirements Imposed on Mortgage Services to Help More Homeowners Prevent Foreclosure?

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.