Categorized | Commercial

Bank of America Seeks Deal to Ensure Lawsuit Protection

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Reports are surfacing that Bank of America has made an offer to state and federal officials in an attempt to save itself from any potential lawsuits over their mortgage practices. In exchange for such protection, the banking giant is looking for a settlement that would involve a reduction in the amount of money that homeowners owe on their loans. The settlement is actually part of a deal being prepared by the nation’s five largest banks and both federal and state officials that has come about due to the possibility that fraudulent or inadequate paperwork was used during the foreclosure process against homeowners.

Bank of America is very positive that the settlement will go through, though some state officials are against any such deal. State officials, though, will not rule out the possibility of agreeing to the deal, and are claiming that it will be considered as part of the deal as a whole. Bank of America isn’t the only bank offering up a potential deal in exchange for being immune against possible lawsuits. In fact, that has been a principle issue for both sides during these talks.

If the settlement pursued by Bank of America is accepted, it will affect more than just the bank and homeowners. With the principal reduced on mortgage loans, investors will also take a tremendous hit. Other questions must also be asked of the suggested deal. For example, there is no clear indication as to what the qualifications will be regarding the homeowners that face a principal reduction. A past settlement included only situations that benefitted homeowners and investors alike, though there is no clear indication as to whether or not a similar plan would be put into place with the current suggested settlement.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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