Rep. Waters: $20 Billion Settlement Would Be Too Low

By Nick Timiraos
WSJ

A top Democrat on the House Financial Services Committee signaled that the broad outlines of a settlement to resolve mortgage-servicer abuses should push for penalties higher than the reported $20 billion figure.

On Thursday, the Journal reported that the Obama administration, federal regulators, and state attorneys general were ironing out broad outlines of a settlement to resolve abuses that first surfaced when foreclosure processes broke down last fall. The settlement could push for banks to write down loan balances for troubled borrowers, and several stakeholders in the talks have pushed for a settlement of more than $20 billion.

Rep. Maxine Waters (D., Calif.) issued a statement on Friday implying that such a figure would be too low.

“Though this figure sounds like a large settlement to those unfamiliar with the scale of the foreclosure crisis, we must remember that over 3 million homes have been lost to foreclosure since 2006,” she said in the statement. “This settlement is too small, and will likely have one of two results: either borrowers will receive insignificant principal reductions, or reductions will only be available to a small subset of troubled borrowers.”

(More here.)