Mortgage settlement means billions for struggling California homeowners

Posted: Feb 9, 2012 6:21 PM by Kathy Kuretich
Updated: Feb 10, 2012 8:13 AM

Local attorney says mortgage settlement may not be enough

The largest slice of the bank settlement pie, is coming to California -- $18 of the $25 billion dollars.

Attorney General Kamala Harris broke it down at a press conference, Thursday.
She said the five largest lenders, Wells Fargo, Bank of America, JP-Morgan Chase, Citigroup, and Ally Financial will pay struggling homeowners over the next three years.
$12 billion will go to 250-thousand California homeowners who are underwater and behind on their loans.
$849 million will go to 28-thousand California homeowners who are underwater but current on their payments, and another $279 million will go to 140-thousand California homeowners in foreclosure restitution.
"This issue has never been about anything but allowing homeowners, hardworking people to be able to stay in their homes," said Attorney General Harris.

But the plan has its critics, including Ed Butowsky, a wealth manager, who appeared on several nationally syndicated radio and television shows, Thursday. He told KSBY, "There's a lot of political statements here, but very little substance, and very little of this is going to help anybody. None of this is going to help the economy, except in my mind, be a really nice political statement for Obama to use to get re-elected."

San Luis Obispo real estate attorney John Fricks of Ogden & Fricks, LLP said the settlement is a step in the right direction... but he's cautiously optimistic.
"Part of my skepticism is that I've seen government programs try to solve this problem before and it hasn't been as successful as promised," he said.
To qualify, your loan must be owned by one of the five banks... not Fannie Mae, Freddie Mac, or other investors to see any relief -- leaving out the majority of struggling homeowners in California.
"While this is a large dollar value, the problem is multi-trillion dollar in scope," said Fricks.