<br clear="all"><div class="hedbyline"><h1><a href="http://money.cnn.com/galleries/2012/real_estate/1203/gallery.mortgage-settlement/index.html">The $26 billion crapshoot</a></h1><h2>The foreclosure settlement looks like a hit-or-miss game that leaves millions of homeowners out in the cold. </h2>
</div><div class="header"><div class="slidehed">A roll of the dice</div><div class="pagination"><div class="label">1 of 6</div></div></div><div class="slideimg" style="width:340px"><img src="http://i2.cdn.turner.com/money/galleries/2012/real_estate/1203/gallery.mortgage-settlement/images/bank-settlement.jpg" alt="A roll of the dice" height="256" width="340"></div>
<br>Homeowners
hoping the $26 billion foreclosure abuse settlement would mean big
savings on their mortgages were mostly disappointed. Even though a
million borrowers will have their principals slashed by as much as
$100,000 or more, most are not eligible for a workout simply because the
bank that <i>issued</i> their mortgages, didn't <i>hold</i> their mortgages.<br><br>During
the housing boom years of the early 2000s through 2007, about 20% of
loans went into the bank's own portfolios. The rest were sold off,
either to Fannie Mae or Freddie Mac or to investors.<br><br><b style="color:rgb(255,0,0)">Only loans
held by the banks and some of their investors will be modified. The rest
of the borrowers will be left out in the cold.</b><br><br> "It's not as
long a shot as winning the lottery but there's a lot of chance
involved," said Guy Cecala of Inside Mortgage Finance.<br><br>The
Department of Housing and Urban Development, which helped negotiate the
settlement, recognizes that it left out many homeowners. <br><br>"From
the outset we have been very clear that the settlement is not intended
to solve or resolve all the issues related to the housing crisis," HUD
spokesman Derrick Plummer said earlier this month. "It's just one step
in a host of efforts the Obama Administration is taking to help the
housing market recover.<br>-- <br>Art Deco (Wayne A. Fox)<br><a href="mailto:art.deco.studios@gmail.com" target="_blank">art.deco.studios@gmail.com</a><br>