Alabama is joining a $25 billion mortgage servicing settlement - WSFA.com Montgomery Alabama news.

Ala. joins $25B mortgage servicing settlement

MONTGOMERY, AL (WSFA) -

Alabama Attorney General Luther Strange announced Thursday that the state is formally joining a $25 billion national joint federal-state agreement with the nation's five largest mortgage servicers relating to foreclosure abuses and fraud, as well as unacceptable nationwide mortgage servicing practices. 

The AG's office said in a release that the proposed agreement provides an estimated $106.7 million in direct relief to Alabama homeowners. Strange's offices added that the settlement also addresses future mortgage loan servicing practices. 

The settlement was announced in Washington, D.C. by U.S. Attorney General Eric Holder, U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan and a bipartisan group of state attorneys general.the

"This agreement not only provides much needed relief to Alabama borrowers, but it also puts a stop to many of the bad behaviors that contributed to the mortgage mess in our state and across the country," said Attorney General Strange.


ALABAMA'S ESTIMATED SHARE

            The state's estimated share of the settlement is $106,701,096.

  • Alabama's borrowers will receive an estimated $29,879,070 in benefits from loan term changes and other relief.
  • Alabama's borrowers who lost their home to foreclosure from January 1, 2008 through December 31, 2011, and encountered servicing abuse would qualify for $20,595,756 in payments to borrowers.
  • The value of refinanced loans to Alabama's underwater borrowers would be an estimated $29,751,516.
  • The state will receive a direct payment of $26,474,753 directed to the Attorney General's Office.

- FRAUD WARNING -

The Attorney General's office is warning folks to be wary of fraud related to this settlement.

Read More
 


 


AG Strange's office called the settlement unprecedented, and added that it will hold banks accountable for past fraud and abuses while providing relief to homeowners.

Under the agreement, the five servicers have agreed to a $25 billion penalty under a joint state-national settlement structure.   

Nationally:

  • Servicers commit a minimum of $17 billion directly to borrowers through a series of national homeowner relief effort options.  Servicers will likely provide up to an estimated $32 billion in direct homeowner relief.
  • Servicers commit $3 billion to an underwater mortgage refinancing program.
  • Servicers pay $5 billion to the states and federal government ($4.25 billion to the states and $750 million to the federal government).
  • Homeowners receive comprehensive new protections from new mortgage loan servicing and foreclosure standards.
  • An independent monitor will ensure mortgage servicer compliance.
  • States can pursue civil claims outside of the agreement including securitization claims as well as criminal cases.
  • Borrowers and investors can pursue individual, institutional or class action cases regardless of agreement. 

Under the settlement, immunity from criminal offenses is not granted and will not affect criminal prosecutions, according to the release. It also leaves homeowners or investors open to pursuit of individual, institutional or class action civil cases against the five servicers. 

For more information on the proposed agreement: 

www.NationalMortgageSettlement.com

www.HUD.gov

www.DOJ.gov

Bank of America: 1-877-488-7814
Citi: 1-866-272-4749
Chase: 1-866-372-6901
GMAC: 1-800-766-4622
Wells Fargo: 1-800-288-3212

 

INFORMATION SOURCE: Attorney General Luther Strange's Press Office

 


Scope of Settlement

Updated:

"While this settlement includes significant relief for homeowners, it also puts in place new protections for homeowners in the form of mortgage servicing standards," said Attorney General Strange. The More>>

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