Sen. Richard Shelby, R-Ala., the ranking member of the U.S. Senate Committee on Banking, Housing and Urban Affairs, has raised concerns on the continued lack of details surrounding the $25 billion foreclosure settlement announced on Feb. 9.
In a statement delivered yesterday before the committee, Shelby questioned when the full settlement will be made public. He also raised concern that many homeowners may not benefit from the final deal.
‘To date, Congress and the public have been given only the broad outlines of the terms of the settlement,’ he said. ‘As a result, there are many unanswered questions about how the settlement was reached and how it will operate. The most important question is: how will this money be distributed? In particular, is there a connection between how much harm a homeowner suffered and the amount of compensation a homeowner receives?
‘Although having the settlement compensate as many people as possible may make sense politically, settlement funds should compensate homeowners who suffered actual harm and deter future violations of the law,’ he continued. ‘The settlement, however, appears to come up short on both counts. For example, the administration's press release indicates that homeowners who were improperly foreclosed upon will receive only about $2,000.Â As a result, homeowners who were wrongfully foreclosed upon will still likely have to pursue the remainder of their claims in court or through financial regulators. In contrast, many homeowners who suffered no legal harm appear to be eligible for compensation under the settlement as well.’