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| An apartment building being razed in Cleveland. (photo: Michael Williamson/The Washington Post/Getty Images) |
08 April 12
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February, JPMorgan Chase donated a home to an Iraq war veteran in
Bucoda, Wash., and Bank of America waived the $140,000 debt that a
Florida man still owed after the sale of his foreclosed home. Over the
last year, Wells Fargo has demolished about a dozen houses in Cleveland.
Banks do things like this - real estate transactions that do nothing to prevent foreclosure
- all the time. But beginning this month, they can count such
activities as part of their new commitment to help people stay in their
homes.
That commitment comes under the landmark $25 billion
foreclosure abuse settlement between the government and five major banks
announced last month. The settlement promises that of the $25 billion,
the banks will give $17 billion "in assistance to borrowers who have the
intent and ability to stay in their homes," according to a summary of
the settlement. But more than half of that money can be used in ways
that will not stop foreclosures, including some activities that are
already standard bank practices.
For example, the banks can wipe out more than $2
billion of their obligation by donating or demolishing abandoned houses.
Almost $1 billion can be used to help families that have already
defaulted move out.
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