But from what I have seen so far, the settlement will do very little to help the housing market. It will benefit the banks who will be able to use the money they are paying for their illegal practices to fix problem mortgages on their books, and reward those who took out mortgages they could not afford instead of helping those who are innocent victims of the housing mess.

Of the $25 or $26 billion (both figures have been mentioned) only $20 billion is set aside to reduce interest payments or mortgages, and $17 billion is for those facing foreclosure with the five banks.

Only $3 billion is left for those who are responsible and despite being under water on their homes, are current on their mortgage payments and the only benefit they can receive is to have their mortgage rates reduced to 5.25 percent.

The banks have THREE years to use the money to help the homeowners. That will be too late for too many people.

And there are one million homeowners who would be eligible, those whose mortgages were handled by the five banks: “The biggest, Bank of America, would provide $11.8 billion, followed by $5.4 billion from Wells Fargo, $5.3 billion from JPMorgan Chase, $2.2 billion from Citigroup and $310 million from Ally. Bank of America would contribute an additional $1 billion for Federal Housing Administration loans,” the New York Times reported.

By my math the $20 billion divided by one million comes out to $20,000 for the average family. Now that might make a big difference those those with small mortgages, but what does it do for those who have $200,000 to $400,000 mortgages? Not a lot.

And about half of the money will go to Florida and California, according to the New York Times:

“Homeowners in two states — Florida and California — will reap more than half of the $26 billion settlement, a reflection of the disproportionate number of loans that are delinquent or exceed the value of the underlying property there, government regulators said.”

Most of the money is set aside to help those who are at risk of foreclosure – $17 billion – which means that the banks are helping themselves with their troubled loans, and little is left for those who are current in their mortgage payments.

And if nine other major mortgage servicers join the pact, a possibility that is now under discussion with the government, the total package could rise to $30 billion.

First of all we are only talking about $25 billion, which is a drop in the bucket compared to the scope of the problem involving millions of foreclosures and the 25 percent of all mortgages that are under water (meaning that the mortgage is higher than the value of the home).

Part of the $25 billion – about $1.5 billion – will go to 750,000 people to those who lost their homes to foreclosure during the past four years. They will each receive $1,500 to $2,000 whether their foreclosures were done legally or illegally.

These facts trouble some, including Dick Bove, a banking analyst.

“Those people lucky or smart enough to stop making payments on their homes may get their loan balances reduced,” Bove, vice president of equity research at Rochdale Securities,   said on CNBC TV Thursday. “Other beneficiaries of the agreement may be homeowners who have seen the value of their houses drop below the size of their mortgages. They get a freebie that other homeowners who have paid their mortgages down will not get.”

Bove, who called the agreement “the mortgage deal from hell,” said doing so will help those who bought homes with little money down and who either fell behind on payments or stopped paying their mortgages altogether.

“Those who brought down their principal with 20 percent down payments and who kept up on their obligations would not benefit, and ultimately could suffer if the mortgage modifications and principal writedowns drag down neighborhood property values.”

“The government has selected a small minority of homeowners to get this benefit (1 million of 75 million or 1.3 percent of the total),” he wrote in an analysis. “Homeowners who made large down payments on their homes or made the terrible mistake to pay down the principal on their mortgages do not qualify. Homeowners who made minimal or no down payments will get the windfall benefit of a lower principal repayment or a cash payment.”

“This is excellent news for the residents of Coventry and the farmers market,” said state Agriculture Commissioner Steven K. Reviczky. “I commend the Town of Coventry and the farmer’s market for their work to ensure this great Connecticut tradition was not lost, and I thank Governor Malloy for getting the parties talking again. Connecticut has a rich agricultural history, one that we want to en-courage and expand.”

Negotiations to renew the lease between the Hale Homestead and the farmer’s market stumbled last fall over mutual concerns about expense and liability issues. During winter discussions, the parties reached an agreement to establish the Town of Coventry as the tenant with the farmer’s market sub-leasing the property. This assuaged the liability concerns and reduced insurance expenses, allowing the savings to be applied to the rental fees. The agreement also outlines that the town will coordinate the use and maintenance of the new barn which will provide shared income with a reserve held for barn maintenance.

Of the state’s 125 farmers’ markets, the Coventry Regional Farmers’ Market, now in its eighth year of operation, is one of the largest and most heavily attended. In 2011, it accounted for $500,000 in sales and was visited by over 75,000 people.

The Nathan Hale Homestead was the family home of State Hero Nathan Hale. Richard Hale, Na-than’s father, was a prosperous livestock farmer. The house on the homestead, built in 1776, was deeded to Connecticut Landmarks in the 1940s. Much of the acreage associated with the Hale farm is now the Nathan Hale State Forest.

“It took considerable time, effort, and energy from everyone involved to reach this new agreement, but it was worth it,” Commissioner Reviczky said. “This is a marriage of one of the state’s most popular farmers’ markets and one of Connecticut’s historical treasures. The complete package is much greater than the sum of its parts.”

www.CTGrown.gov www.ct.gov/doag

According to Jepsen, , a member of the negotiating team:

• Connecticut borrowers will receive an estimated $119 million in benefits from loan term modifications and other direct relief.
• The estimated 7,500 Connecticut borrowers who lost their home to foreclosure from January 1, 2008 through December 31, 2011 and suffered servicing abuse would qualify for an estimated $1,500 in cash payments to individual borrowers.
• The value of refinanced loans to Connecticut’s underwater borrowers would be an estimated $36 million.

The state will receive a direct payment estimated at $27 million to help pay for local foreclosure prevention programs, such as the Connecticut Department of Banking’s foreclosure prevention hotline, HUD- approved housing counselors, the Judicial Branch’s foreclosure mediation program, non-profit legal aid groups that help homeowners facing foreclosure, and loan modification programs supported by the Connecticut Housing Finance Authority.

While all this seems wonderful, watch for the details and also see who benefits and who doesn’t. My initial impression is that those who knowingly bought houses or condos without any downpayment and could not afford the homes, may get partially bailed out, especially if they stopped making mortgage payments, while those who were responsible got nothing.

Also, my understanding is that government backed mortgages are not included in this deal.

Here is the rest of Jepsen’s statement from today:

Attorney General George Jepsen, a member of the negotiating team, joined Thursday in the national announcement of a landmark $25 billion joint federal-multistate agreement with the nation’s five largest mortgage servicers over foreclosure abuses and fraud, and unacceptable nationwide mortgage servicing practices.

The largest joint federal-state settlement in history was produced after 15 months of intense negotiations. All 50 states are participating. It provides more than $190 million in relief to Connecticut homeowners and the state, and imposes new consumer protections on future mortgage loan servicing practices.

Jepsen was among a bipartisan group of state attorneys general in Washington D.C. participating in the announcement Thursday with U.S. Attorney General Eric Holder, U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan.

Under the agreement, Bank of America, Citibank, JP Morgan Chase, GMAC and Wells Fargo, have agreed to pay a combined $25 billion under a joint state-national settlement structure.

“I helped to negotiate and strongly support the bipartisan settlement reached with the nation’s largest mortgage servicing companies over their widespread and improper foreclosure practices. There are many reasons why I believe this settlement is good for Connecticut, but the most important reason is this: it provides immediate help to thousands of Connecticut homeowners at a time when they can still use that help to save their homes,” Jepsen said.

“As important as the financial relief, the settlement requires the banks to change the way they service distressed loans and it holds the banks accountable for what have become familiar abuses. For the first time, state attorneys general will have authority to monitor how federally regulated banks comply with the new servicing rules and to impose heavy penalties on those banks that fall short,” Jepsen said.

The unprecedented joint state-federal settlement is the result of a massive civil law enforcement investigation and initiative that included state attorneys general and state banking regulators across the country, and nearly a dozen federal agencies.  The settlement holds banks accountable for past mortgage servicing and foreclosure fraud and abuses and provides relief to homeowners.  With the backing of a federal court order and the oversight of an independent monitor, the settlement will stop future fraud and abuse.

Nationally:

• Servicers commit to provide a minimum of $17 billion directly to borrowers through a series of national homeowner relief effort options, including principal reduction.  Given how the settlement is structured, servicers will actually provide up to an estimated $32 billion in direct homeowner relief.
• Servicers commit $3 billion to a mortgage refinancing program for borrowers who are current, but owe more than their home is currently worth.
• Servicers pay $5 billion to the states and federal government ($4.25 billion to the states and $750 million to the federal government).  The state payments include funding for payments to borrowers for mortgage servicing abuse.
• Homeowners receive comprehensive new protections from new mortgage loan servicing and foreclosure standards.
• An independent monitor will ensure mortgage servicer compliance.
• Government can pursue civil claims outside of the agreement and any criminal case; borrowers and investors can pursue individual, institutional or class action cases regardless of agreement.

The settlement does not grant any immunity from criminal offenses and will not affect criminal prosecutions.  The agreement does not prevent homeowners or investors from pursuing individual, institutional or class action civil cases against the five servicers.  The pact also enables state attorneys general and federal agencies to investigate and pursue other aspects of the mortgage crisis, including securities cases.

The final settlement agreement, through a consent judgment, will be filed in U.S. District Court in Washington, D.C., and will have the authority of a court order.

In many cases, participating mortgage servicers will contact borrowers directly regarding loan modification and refinance options.  However, borrowers may contact their mortgage servicer at the numbers listed below to obtain more information about specific loan modification programs and whether they qualify under terms of this settlement. A settlement administrator hired by the state attorneys general may also contact borrowers and victims of foreclosure.

Bank of America: 877-488-7814

Citi: 866-272-4749

Chase: 866-372-6901

GMAC: 800-766-4622

Wells Fargo: 800-288-3212

More information will be made available as the settlement programs are implemented.

More information on the agreement is available at the following websites

In their one-page decision issued Wednesday, the regulators wrote, “The Authority reaffirms and rules, consistent with past precedent, that applicants in the present proceeding must demonstrate that the proposed merger is in the public interest in order to gain PURA approval.”

Attorney General George Jepsen said he appreciated the PURA’s swift response. “This is an important step forward for consumers. It means that this merger cannot be approved unless it benefits not only utility shareholders, but the ratepayers in Connecticut.  I will continue to press for real tangible benefits to all Connecticut Light & Power Co. and Yankee Gas customers,” Jepsen said.

Consumer Counsel Elin Swanson Katz said “PURA confirmed that Northeast Utilities and NSTAR need to show us that their proposed merger will be good for Connecticut’s ratepayers. We were confident that this was the correct standard, and we thank the PURA for quickly clarifying that. Connecticut ratepayers should feel very comfortable with this decision.”

Hearings before the PURA on the proposed merger begin next week. The schedule calls for a proposed draft decision March 26 and a final decision April 2.

Assistant Attorneys General Michael Wertheimer and John Wright are representing the Attorney General in this matter with Associate Attorney General Joseph Rubin. Staff Attorneys Victoria Hackett and Joseph Rosenthal are representing the Consumer Counsel.