“A “mortgage deal from hell” between federal and state governments with big banks under which the latter will fork over more than $25 billion to aid struggling homeowners will do mainly one thing: punish responsible borrowers, says banking analyst Dick Bove.
Money will compensate victims of alleged foreclosure fraud and those who owe more on their homes then they’re worth.
It’s basically unfair and populist, says Bove, the vice president of equity research at Rochdale Securities, as those who made down payments and kept up with payments will see nothing while those who didn’t will be rewarded.
“Those people lucky or smart enough to stop making payments on their homes may get their loan balances reduced,” Bove tells CNBC. ”
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