Mortgage relief didn't help many keep their homes, critics say

By E. Scott Reckard Sep. 25, 2013 

When five giant mortgage firms signed a landmark $25-billion mortgage settlement last year, officials hailed debt forgiveness as the primary strategy to preserve home ownership.  The banks hoped to avoid further enforcement action over widespread foreclosure abuses; federal regulators and state attorneys general aimed to prevent even more foreclosures.

“This isn’t just about punishing banks for their irresponsible behavior,” Housing and Urban Development Secretary Shaun Donovan said. “It’s also about requiring them … to help homeowners stay in their homes.”

Advocates for borrowers took such comments to mean that the banks would prioritize debt write-downs on first mortgages, which banks resisted before the settlement. Now, with nearly all the promised relief handed out, it is clear that the banks had other ideas.…..To Read More…..