After many months of negotiation, 49 state attorneys general and the federal government have reached agreement on a historic joint state-federal settlement with the country’s five largest loan servicers: ALLY/GMAC, BANK OF AMERICA, CITI, JP MORGAN CHASE AND WELLS FARGO. Arizona is included in the settlement. The only state not included is Oklahoma. The settlement will provide as much as $25 billion in relief to distressed borrowers and direct payments to states and the federal government. It’s the largest multistate settlement since the Tobacco Settlement in 1998.
The agreement settles state and federal investigations finding that the country’s five largest loan 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 whose loans are owned by the settling banks as well as to many of the borrowers whose loans they service. Certain homeowners whose homes were foreclosed on between January 1, 2008 and December 31, 2011 may be entitled to a one-time cash award of between $1,500 to $2,000.
We will be reporting more details on this settlement in upcoming blogs. In the meantime, be on the alert for scammers contacting you about having you hire them to obtain your settlement. Neither the banks nor the Attorneys General will charge a fee to speed your settlement. You should not have to hire anyone (lawyers included) to participate in the settlement.