Regulator Stands In Way Of Potential Multi-Billion Dollar Mortgage Settlement

The Obama administration is seeking to broker a deal that would have the nation’s largest mortgage lenders agree to pay as much as $30 billion in fines to settle state and federal claims that they abused borrowers and illegally foreclosed on homes, according to state and federal officials engaged in the talks.

Under the terms of the proposed deal under discussion, the government would apply the fines toward an expanded relief program for troubled homeowners, while focusing on broad loan forgiveness. Some 27 percent of all homeowners with a mortgage now owe the bank more than their properties are worth, according to real estate site Zillow.com, amplifying calls to shrink mortgage balances.

The fact that the administration is now pursuing such a course reflects the widespread consensus that the President’s signature anti-foreclosure program has been a disappointment, leaving millions of American households vulnerable to losing their homes in the face of persistently high

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