Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Late last week, the New York Times reported that after the $25 billion foreclosure-settlement deal in 2012, another deal is expected to be announced very soon. The deal is anticipated to address the issues not dealt in the 2012 settlement.

The $10 billion settlement deal is anticipated to be announced this week by the Office of the Comptroller of the Currency (OCC) along with other banking regulators. Fourteen banks, including JPMorgan Chase & Co. (JPM - Analyst Report), Bank of America Corporation (BAC - Analyst Report), Citigroup, Inc. (C - Analyst Report) and Wells Fargo & Company (WFC - Analyst Report), are going to be part of the deal.

The deal is expected to end the efforts of the U.S. government to hold the mortgage servicers responsible for faulty foreclosure practices. Moreover, the process initiated by the OCC in 2011 – to review all the borrowers’ files that were wrongly foreclosed in 2009-2010 – would also come to an end.

Under that proposal, the banks were required to hire independent consultants to go through the loan files and look for any faulty foreclosure practice. However, this is turning out to be a costly affair for the banks – having already spent nearly $1.3 billion on the consultants hired. Therefore, they have opted for a one-time settlement deal.

Under the deal, a significant amount – nearly $3.75 billion – will be utilized to compensate homeowners whose properties were wrongfully foreclosed. The remaining amount will be used for providing relief to troubled homeowners through principal reductions and loan modifications.

At present, regulators and the banks are negotiating to determine the individual payouts to the aggrieved homeowners. Further, the regulators would give credit to the banks for compensation that they have already paid to the borrowers.

The deal, if finalized, will be a relief for the banks as well as homeowners. We are hopeful that like the earlier one, this deal would also be a decisive step in restoring confidence in businesses and rejuvenating the sagging housing market.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%