Consumer advocates said settlement amounts can obscure the actual costs at stake. But since the disputed business behaviors affected mortgage investors, not mortgage borrowers directly, they welcome any consumer aid.
“This is public policy making through settlements that aren’t even related to the nature of the lawsuit,” says Ira Rheingold, executive director of the National Association of Consumer Advocates. “But there’s no other tool available for people who are concerned about poor communities right now.”
In the deal with JPMorgan in November, the department had a clear message for homeowners: Billions of dollars’ worth of help was coming. Attorney General Eric Holder at the time described the appointment of an independent monitor who would distribute $4 billion set aside for homeowner relief.
The actual relief is more complicated than cash handouts, however.
Both Citigroup and JPMorgan earn credits under the settlement from a “menu” of different consumer-friendly activities, according to settlement documents. The options are effectively an update of the consumer relief previously provided through the national mortgage servicing settlement, a 2012 deal between state attorneys general and the major banks.
JPMorgan probably will earn its $4 billion in credits under the settlement through a total of $4.65 billion of activities that qualified as relief, according to a report by Enterprise Community Partners, a nonprofit run by executives from low-income housing groups and major banks.
More than half will come from principal reductions, with the rest earned through actions such as writing new loans in distressed areas, donating foreclosed properties to community groups and temporarily suspending payments on some loans.
The report described the settlement as “a reasonable model from a consumer perspective.” But one of its authors, Andrew Jakobovics, acknowledged that many of JPMorgan’s credits probably will come from activities that are part of its regular business practices. The bank has announced plans to complete its obligations at least one year ahead of schedule.
Citigroup’s settlement gives it until the end of 2018 to earn $2.5 billion in credits. It must provide half its $825 million in principal reduction credits in neighborhoods designated as “hardest hit” by the Department of Housing and Urban Development because of high concentrations of foreclosures and vacant properties.
It also can earn credit by waiving some closing costs on new loans to low-income home buyers and forgiving principal on loans where the bank began a foreclosure but never completed it.
“Will it cost them money? No,” said Rheingold, who said he supports the settlements. “But would they have done it otherwise? No.”
Like BlackAmericaWeb.com on Facebook. Follow us on Twitter.
« Previous page 1 2
Also On Black America Web:
This Week’s Celebrity Instagrams (6/18-6/24)
25 photos Launch gallery
1. Me & the homie @jaleelwhite #RujohnFoundation Happy to be in Jamaica! Good times
1 of 25
2 of 25
3 of 25
4 of 25
5. Good Morning. Early day in Detroit! Making press rounds for @thebossnetwork's Ladies That Lead Tour. Thank you @traycemadre and @colourbynumbr for my glam.
5 of 25
6. POWER the best show on TV @djenvy, Queens we so big out here. #EFFENVODKA #FRIGO
6 of 25
7. They said u lost a step, wasn't explosive as once was, the best days was in the real view, questioned your drive, your leadership, your commitment, you don't have killer instinct, going back home is the worst mistake in your career, he got the coach fired, players traded, won't work between him and Kyrie, Him and Kev won't work, love your teammates to much, there's no way he can deliver a championship in his hometown, etc etc etc.... But guess what THATS NONE OF MY BUSINESS #StriveForGreatness #ThisOneIsForTheLand #PutSomeRespeckOnMyName Hahahaha!!! Yes sir
7 of 25
8. Oooooh weeee this man right here is responsible for at least three of our four babies!! #JOE ❤❤❤🎤 #rnb #king #voicelikebutter #ForPeetesSake
8 of 25
9. Hanging with my @abcnetwork family! @abcunclebuck tonite y'all check us out ! @anthonyanderson @traceeellisross
9 of 25
10. My broski ( @sayeedshahidi ) and I are on Top 5 Live on @go90 at 5 (which is super duper close)! Make sure to tune in :) #UncleBuck #Blackish
10 of 25
11. Lights out💤 #GoodNight
11 of 25
12. Late nights mornings
12 of 25
13. Ran into the lovely talented @siedahgarrett on this brutiful favvuz deh!
13 of 25
14. #halal #love #thedargans #kattwilliamsSHOW #mashallah when that Jennah piece HIT!! @sweetjennahcollection glasses by @baddieglamaccessories LIZ 😍 @dynamiteko top @dazzledmv and jeans @thevision414 and shoes: @louboutinworld
14 of 25
15. Big Hair and Optical Illusions #OceanDrive #MiamiLiving #coverparty
15 of 25
16. MAMA and THE SAVAGES ... ⚓️ #supportyourlocalgirlgang
16 of 25
17. From the bottom of my ❤️, thank you new followers & old! & hello fellow night owls! #grateful #racheltrue #naturalhair #curlyhair #curlygirl #healthyhair
17 of 25
18. I feel so grateful because I met these amazing young minds, visiting from Houston TX, during their college tour stop today at #usc.These students are ALL extraordinary and embody academic excellence so I'm humbled to have shared a few moments with them to applaud and celebrate their bright futures ahead! Thank you @EmergeFellows for inviting me to speak and blessing me with your love and attention this afternoon!
18 of 25
19. Happy Fathers Day Pops. U taught me how to be a man. Lessons of love, hard work & gratefulness. Sorry the fishing didn't stick. LOL. I Love U!
19 of 25
20. Sky Zone and Ice Cream! Best Fathers Day Ever!! Photo credit @mariahcarey
20 of 25
21. Look what finally came in the mail 😎 #mtvmovieawards2016 💥+🌽! #straightouttacompton
21 of 25
22. Claudia Jordan: ....
22 of 25
23. 'Member that time I almost knocked a bajillion dollar camera off the car? Really? Yeah, me neither! #Greenleaf Episode 2 comin atcha!
23 of 25
24. Full of love. #birthday #Cabo
24 of 25
25. Oh hey! Look who just joined Snapchat
25 of 25