Bank of America Settlement Could Cause Unwanted Repercussions
by: Andrew Schneider, July 4, 2011 10:07:00 am
Attorneys general from all fifty states are pushing for major banks to pay up to $30 billion in fines and penalties for the banks' role in the subprime mortgage meltdown. Real estate attorney Edward Mermelstein:
"It's likely that the pressure is going to be increased now that Bank of America has moved forward with the settlement. The other banks are in a similar position."
Jordan Goodman is a personal finance expert and the author of Master Your Debt. Goodman says that, in the wake of the Bank of America deal and others like it, banks are more reluctant than ever to lend to would-be homeowners.
"Even people with good incomes, good credit scores, decent down payments, like 10% down payments, are having a really hard time getting mortgages these days because the banks are so tight in reaction to these settlements."
Goodman says banks may be waiting to foreclose on as many as three million more homes. He says that could act as a drag on the economy for at least another three years.
According to online tracking firm RealtyTrac, Harris County led Texas in May with nearly 1900 foreclosure notices. Runner-up Dallas County had roughly 1200.
Andrew Schneider, KUHF Business News.