Netizens Deride Foreclosure Settlement

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By Les Christie

NEW YORK -- The $25 billion foreclosure settlement has many Americans crying foul.

While some claim the deal helps too few homeowners, others say it gives irresponsible borrowers an undeserved bailout.

"This entire deal sucks! Keep taking away the chances for middle class America to get ahead and what good is our American system," wrote a reader with the handle Bushywalrus.

"So what the government is telling me is if I were to go break the law. LIE CHEAT and STEAL change all my morales. I would get away clean and not have to pay a cent," wrote nnmfam.

What about me? As part of the mortgage settlement, four out of the five major lenders -- Citibank, JPMorgan Chase, Wells Fargo and Ally Financial -- have promised to reduce mortgage balances for underwater borrowers who are behind on payments by as much as $20,000. While Bank of America plans to reduce principal on loans by an average of $100,000. But these reductions will only occur for a select group of borrowers.

"I'm under water, I've lost 10s of thousands in value. I may not be with one of these banks, but it is because of them that the market is where it is. So I get to pay for others' problems? Where's my bailout? Where's my refi? This stinks," wrote tet1953.

"[T]hink about this as well, BOA reduces someones mortgage by 100k... 3 years later market rebounds.. house prices go up.. that person sells home... they walk away with profit... all the while... Person B that didnt get bail out tries to sell.. they are still under water...," wrote mikesoda.

Those who have a mortgage held by Fannie Mae or Freddie Mac -- roughly half the market -- are also cut out of the deal. In addition, loans insured by the Federal Housing Administration are ineligible, leaving many homeowners feeling left out in the cold.

"It is just a ridiculous that we have no help for the government insured loan of FHA. So much for Fair Housing Administration," wrote AnneT1127.

The big banks are getting away with murder. "Once again the fat cat bankers lobbied long and hard to water this settlement down to nothing," wrote Bubingeorgia.

Many readers echoed that sentiment, noting that the $25 billion deal was not nearly enough compared to the amount of money homeowners have lost since the housing bubble burst.

"Still trying to figure how the banks got away with paying 26 billion, which is a fraction of a % of trillions of dollars. Now we find out the mortgages they sold at 100% profit are not liable to claim any part of the 26 billion. LOL," wrote gophacks.

Some commenters are angry with the government for not coming down harder on the banks for their foreclosure abuses.

"[I] bet the government thinks they have really done something great! what a bunch of losers. i want to know how much the banks made off their criminal actions and compare it to what they have given back," wrote 1ajs1.

They don't deserve a bailout. Many readers felt the settlement is a bailout for irresponsible borrowers that overleveraged themselves and who are now being rewarded for it. In fact, there are very few provisions to help those who are diligently paying their mortgage under the settlement deal. Only a small fraction of the settlement money -- $3 billion -- will go toward refinancing mortgages for those who are current on payments.

"If they bail out the morons who did NOT pay and screw us paying customers this is a slap in the face to ALL of us... You don't pay your mortgage you lose the home simple as that," wrote Jacknyd.

Calsfdude wrote: "Why should we or the government buy houses for greedy people who can't afford any house? It's their fault. They had no money. They thought that they could make a quick buck. They played and lost."

"The moral of the story is to borrow as much as you can, put zero down, and wait for bailouts," concluded J.d. Free.

24 PHOTOS
Taking Inventory: Foreclosure Finds Across the U.S.
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Netizens Deride Foreclosure Settlement

Location: Trenton, N.J. 
Average Foreclosure Discount: 67.8 percent

Price: $198,500
Beds/Baths: 3/2
Sq. Ft.: N/A

Trenton ranks No. 1 on RealtyTrac's list of cities with the steepest foreclosure discounts. This single-family, whose price was slashed recently, represents one of the killer deals you can find in the city. 

See more foreclosed homes in Trenton, N.J.

Dating back to the 1960s, this Cape Cod-style home offers three bedrooms and two baths. Judging by the average foreclosure discount of New Jersey, the home could be running as much as $150,000 below market value. 

Location: Atlanta 
Average Foreclosure Discount: 49.67 percent

Price: $3.75 million
Beds/Baths: 7/10
Sq. Ft.: 22,000

Foreclosed homes in Atlanta are selling for a staggering 50 percent off, according to data from RealtyTrac. This vacant Mediterranean mansion offers a rather excessive four kitchens along with amenities that include a home theater, pool, spa, steam room and elevator. 

See other foreclosed homes in Atlanta

With its gleaming double staircase, the foyer's richly finished, sparkling-clean interior contrasts with the scene at many foreclosed homes, which often show neglect. 

See other foreclosed homes in Atlanta.

At a whopping 22,000 square feet, the home's cavernous interior is distinctly palatial.

See other foreclosed homes in Atlanta.

Location: Houston
Average Foreclosure Discount: 48.14 percent

Price: $4.29 million
Beds/Baths: 5/9
Sq. Ft.: 12,129

It may be hard to believe that $4.29 million is a below-market price, but given that this stucco Mediterranean is bank-owned and Houston's foreclosure discount approaches 50 percent, odds are that the home could be quite a deal for a well-heeled buyer. 

See other foreclosed homes Houston.

The home has a stone exterior and tile roof, along with a courtyard, pool and outdoor kitchen. The interior stretches 12,129 square feet. 

See other foreclosed homes in Houston.

After weaving around columns and through arched doorways, you reach the home's library or its fully-contained suite, accessible through its own entrance. 

See other foreclosed home for sale in Houston

Location: St. Louis
Average Foreclosure Discount: 54.61 percent

Price: $89,900
Beds/Baths: 3/2
Sq. Ft.: 1,342

This brick-built home, which dates back to 1930, probably hit the market at a reduced price to begin with, but now is running even lower, having just undergone a price cut. The home offers stained-glass windows and wood flooring along with a spruced-up kitchen. 

See more foreclosed homes for sale in St. Louis.

Pictured here is the home's updated kitchen. The residence is even more of a deal if you factor in its purported HomePath Mortgage status. That means if you've got the right credit, you could snatch it for as little as 3 percent down. 

See more foreclosed homes for sale in St. Louis.

Location: Lansing, Mich. 
Average Foreclosure Discount: 44.31 percent

Price: $124,900
Beds/Baths: N/A
Sq. Ft.: 2,228

Squeezed into a condo community, this historic home stands out in the neighborhood because of its stately portico. The home has a long residential tradition, but could go commercial if the buyer so chooses: The house can serve as an office, according to the listing. 

See other foreclosed homes in Lansing, Mich.

The home's portico gives it a tinge of the pastoral era in which it was built. The classic was constructed in 1855. 

See other foreclosed homes in Lansing, Mich.

Location: Grand Rapids, Mich. 
Average Foreclosure Discount: 43.45 percent

Price: $289,900
Beds/Baths: 4/4
Sq. Ft.: 4,339

You get a lot of bang for your buck if you buy  this four-bedroom contemporary. Located on a cul-de-sac, the home spans a generous 4,339 feet and offers a three-car garage. At under $300,000, that makes it an affordable luxury residence.  

See more foreclosed homes in Grand Rapids, Mich. 

Along with its expansive interior, the home also boasts its own heated greenhouse, along with a theater and office. 

See more foreclosed homes in Grand Rapids, Mich. 

Location: Flint, Mich. 
Average Foreclosure Discount: 21.55 percent

Price: $109,600
Beds/Baths: 4/3
Sq. Ft.: N/A

Purchase a foreclosed home in Flint and you're likely to enjoy the benefit of more than 20 percent off. While the city's foreclosure inventory doesn't offer deals quite as striking as those found in some other cities wracked by the housing crisis, the town's average foreclosed-home price still falls far, far below the national median (which hovers above $200,000). Flint's average foreclosed-home price is just $60,578. This well-landscaped home demonstrates how far just $110,000 gets you. 

See more foreclosed homes in Flint, Mich. 

The home may be a bit bare-bones now, but as the listing asserts, the home has "lots of potential." It comes with a pool, a deck and a two-car garage. 

See more foreclosed homes in Flint, Mich. 

Location: Tampa, Fla. 
Average Foreclosure Discount: 24.97 percent

Price: $143,900
Beds/Baths: 6/4
Sq. Ft.: 2,920

At just $49 per square foot, this cheery home in Tampa, Fla., a city that took has taken a real shellacking from the housing crisis, offers of six bedrooms. 

See more foreclosed homes in Tampa, Fla.

The bank-owned property spans nearly 3,000 square feet and boasts a well-equipped kitchen with cherry-stained cabinetry and marble countertops. 

See more foreclosed homes in Tampa, Fla.

Location: Easton, Pa. 
Average Foreclosure Discount: 41.17 percent

Price: $29,900
Beds/Baths: 3/1
Sq. Ft.: 1,556

Alright! A listing description that levels with you. "This is a property that needs some work," it states. The home is not without its virtues, however: It offers ample space, three bedrooms and an attic. Furthermore, buyers can acquire 3 percent buyer's assistance if they make an offer by the 31st of this month. 

See more foreclosed homes in Easton, Pa.

One thing buyers should watch out for if they think about shelling out for these digs is that, as with many other foreclosures, there is no seller disclosure for buyers interested in this home. That means, unless you pay for a thorough inspection, you could discover hidden flaws after purchasing the place. 

See other foreclosed homes in Easton, Pa. 

Location: Chattanooga, Tenn. 
Average Foreclosure Discount: 40.39 percent

Price: $129,000
Beds/Baths: 3/2
Sq. Ft.: 1,456

This staid but cozy home is running for $129,000, about $40,000 over the average foreclosed home price in Chattanooga. The home offers a nice porch and decently finished interior. 

See more foreclosed homes for sale

Pictured here is the home's open dining-kitchen area. The place seems to be in pretty good shape for a foreclosed home. Many fall into poor condition, succumbing to insect infestations or other symptoms of neglect. 

See more foreclosed homes in Chattanooga, Tenn.

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What the Foreclosure Settlement Means for You
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