A controversial weapon could be deployed soon in the U.S. fight against the housing crisis as states and top banks near a deal in their dispute over mortgage abuses — cutting the mortgage debt owed by homeowners.Five major banks could be required to commit roughly $15 billion to reduce principal balances for struggling homeowners and modify loans in other ways under a proposed deal to settle allegations linked to the "robo-signing" scandal.
In the aftermath of the largest home repossession campaign in history, mortgage lenders are holding properties off the market as a matter of strategy. Flooding the fragile housing market with an additional 500,000 to 1.1 million homes -- many of them deteriorating and selling at deep discounts -- would cause already weak prices to fall further.
WASHINGTON—A U.S. housing regulator, responding to last year's "robo-signing" scandal, has ordered mortgage-finance titans Fannie Mae and Freddie Mac to revamp the system for hiring law firms to process foreclosure cases.
MIAMI — Officially, there are 3.5 million homes for sale nationwide. But there are millions more lurking in the shadows — hidden neatly away on banks' balance sheets, stalled in foreclosure court proceedings or simply occupied by nonpaying owners as lenders wait months or years before taking action.