Miami, FL -- (SBWIRE) -- 04/12/2012 -- No one in the real estate industry would argue with the fact that foreclosure situation in the United States over the last ten years has prolonged a real estate and overall economic downturn. The recent settlement between the US Government and five major lending banks, although controversial, means change for the real estate market. According to ruling,
“Under the settlement, which was approved by a federal judge on Thursday, the banks will reduce the principal on loans held by underwater homeowners, refinance some mortgages to today's low interest rates and compensate those who lost their homes due to improper foreclosure practices”.
The Harelik Team, a leading Palm Beach real estate group specializing in Active Adult Communities, commented on the ruling recognizing the need for compromise in that particular situation and suggesting that overall the ruling will be positive for the real estate market. Of course, The Harelik Team and other realtor understand that this was a compromise and leading banks were compensated for their rate reductions for limited legal liability for poor lending practices in the past.
In addition to the agreement to ease interest rates and reducing principal loans, the banks agreed to change their lending practices which is good news for those seeking a more stable real estate industry. As for those hit the hardest by real estate downturn, Palm Beach county and other areas reliant on real estate business, they welcome positive change from the Federal Government and lending companies alike. The Harelik Team and other real estate professional are hoping this increases interest in communities like Valencia Lakes.
The settlement between banks and the Federal Government which amounted to $26 billion in penalty charges for leading lenders was years in the making and marks the end of an era for extreme poor lending practices that negatively impacted the real estate industry and the economy in general.