In , 49 state attorneys general, the District of Columbia and the federal government announced a historic joint state-federal settlement with the country’s five largest mortgage servicers:
The agreement settles only some aspects of the banks conduct related to the financial crisis (foreclosure practices, loan servicing, and origination of loans) in return for the second largest state attorneys general recovery in history https://www.loan-on.com/payday-loans-nj and direct relief to distressed borrowers while they can still use it
- Ally/GMAC
- Bank of America
- Citi
- JPMorgan Chase
- Wells Fargo
The agreement settles only some aspects of the banks conduct related to the financial crisis (foreclosure practices, loan servicing, and origination of loans) in return for the second largest state attorneys general recovery in history and direct relief to distressed borrowers while they can still use it
- Relief to distressed borrowers in the states; and
- Direct payments to signing states and the federal government.
The agreement settled state and federal investigations finding that the country’s five largest mortgage servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct. Both of these practices violate the law.
The settlement provides benefits to borrowers in the signing states whose loans are owned by the settling banks as well as to many of the borrowers whose loans they service. Borrowers from Oklahoma were not eligible for any of the relief directly to homeowners because Oklahoma elected not to join the settlement.
The servicers were required to provide up to $17 billion in principal reduction and other forms of loan modification relief nationwide. They ended up providing over $50 billion in gross relief which translated into $20.7 billion in credited relief under the terms of the Settlement.
State attorneys general submit that the settlement’s requirement for principal reduction has shown that principal reduction modification is one effective and appropriate tool in combating foreclosure.
Aid to borrowers who are current, but whose mortgages exceed their home’s value . Borrowers were able to refinance at historically low interest rates. Servicers were required to provide up to $3 billion in refinancing relief nationwide and actually provided $3.6 billion in credited refinancing relief.
Payments to borrowers who lost their homes to foreclosure with no requirement to prove financial harm and without having to release private claims against the servicers or the right to participate in the OCC review process. Approximately $1.5 billion was distributed nationwide to eligible borrowers. The National Mortgage Settlement Administrator mailed Notice letters to eligible borrowers in 2012 and payments were mailed in 2013 to borrowers who submitted valid claims.The deadline to submit a claim form has passed and claims are no longer being accepted. You can contact the National Mortgage Settlement Administrator toll-free at 1-866-430-8358 with questions.
First ever nationwide reforms to servicing standards ; something that no other federal or state agency had previously been able to achieve. These servicing standards require single point of contact, adequate staffing levels and training, better communication with borrowers, appropriate standards for executing documents in foreclosure cases, ending improper fees, and ending dual-track foreclosures for many loans.
The agreement settles only some aspects of the banks conduct related to the financial crisis (foreclosure practices, loan servicing, and origination of loans) in return for the second largest state attorneys general recovery in history and direct relief to distressed borrowers while they can still use it
- National banks were required to regularly report compliance with the settlement to an independent, outside monitor that reports to state Attorneys General.
- Servicers had a duty to pay heavy penalties for non-compliance with the settlement, including missed deadlines.
This agreement holds the banks accountable for their wrongdoing regarding residential mortgage foreclosures and mortgage servicing. This settlement does not seek to hold them responsible for all their wrongs over the years and the agreement and its release preserve legal options for others to pursue.
State cases against the rating agencies and bid-rigging in the municipal bond ple, continue. Claims and investigations into how Wall Street packaged mortgages into securities also continue.
