As part of their $25 billion settlement in 2012 of lending abuse claims, five of the nation’s largest banks agreed to modify mortgages for borrowers struggling to make their original monthly payments. To the consternation of many investors, the settling banks were given credit not only for modifying loans that they held in their own portfolios, but also for modifying loans that they serviced but that were actually owned by investors.
In June 2014, the Association of Mortgage Investors (AMI) appealed to Attorney General Eric Holder to eliminate investor’s loans from future settlements.
While there is considerable merit to investors’ concerns, AMI’s solution goes too far.
via Settling debts with other people’s money: Use of investor funds in lender settlements.
