Foreclosure settlement to come in a 'matter of weeks,' HUD secretary says - latimes.com

Foreclosure settlement to come in a ‘matter of weeks,’ HUD secretary says

Buy long dated calls (Leaps) in Wells Fargo.  Expectations are very low.  Insider buying, housing near bottom (mortgage prices near rent equivalent), and this headline make for very compelling upside.

June 2, 2011 | 4:49 pm

A settlement between a coalition of federal and state agencies and banks over foreclosure practices will come in a “matter of weeks,” Shaun Donovan, secretary of Housing and Urban Development, told the Los Angeles Times.

Donovan.Donovan Donovan’s agency is involved in the negotiations with the banks, along with attorneys general from all 50 states and officials from the Justice Department and other federal agencies.

The attorneys general and the federal regulators began investigating the practices of the big mortgage servicers after it was revealed last year that they commonly foreclosed on homeowners using faulty paperwork.

For months, the coalition of investigators has been in discussions with the nation’s biggest servicers: Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc.

via Foreclosure settlement to come in a ‘matter of weeks,’ HUD secretary says – latimes.com.

This would be big news for the beleaguered banking sector.  Bank America, JP Morgan, and Wells Fargo are all incredibly oversold and ripe for a very nice bounce.  We own all three of them admittedly at somewhat higher prices but one good day is all we need.  It’s hard to time this kind of news as weeks could be months when the legal system is involved.  Buy call option Leaps in Wells Fargo if you want to get out the line of fire.