Secret clause in mortgage agreement forces taxpayers to foot the bill for banks

This is outrageous. Forty billion dollars of taxpayer monies could very well be used to get banks off the hook for their sloppy, negligent procedures in handling foreclosures. Financial Times: US taxpayers are expected to subsidise the $40bn settlement owed by five leading banks over allegations that they systematically abused borrowers in pursuit of improper home seizures, the Financial Times has learnt. The deal, agreed last week, calls for Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial to pay about $5bn in cash fines and to reduce monthly payments and loan balances for distressed US borrowers by as much as about $35bn.   However, a clause in the provisional agreement - which has not been made public - allows the banks to count future loan modifications made under a 2009 foreclosure-prevention initiative towards their restructuring obligations for the new settlement, according to people familiar with the matter. The existing $30bn...(Read Full Post)