The five major banks have agreed to deliver $10 billion in debt relief for first mortgages. So far, these banks have only written off about $750 million for just over 7,000 borrowers. In fact, as the following article points out, Bank of America, which has the biggest obligation under the deal has yet to complete any modifications as of the end of June.
This settlement comes on the heels of the famous robo-signer scandal that uncovered wide-spread abuses is falsely-signed documentation in the foreclosure process. The fear among some critics is that this settlement fails to address the housing crisis that has 11 million borrowers trapped underwater. So what about those unfortunate folks? If you are currently looking at an underwater mortgage, you should consult with an attorney focused on negotiating for reductions on underwater mortgages. You could wind up paying much less than the banks are looking to collect from you.