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Banks Settle for $8.5 Billion Over Foreclosure Abuses

Banks Settle for $8.5 Billion Over Foreclosure Abuses

On Monday, January 7, 2013, an $8.5 billion settlement over foreclosure abuses was agreed to between 10 large banks and Federal regulators. As part of the settlement, $3.3 billion in direct payments will go straight to borrowers. An additional $5.2 billion will go towards providing homeowners with assistance with loan modifications and forgiveness of deficiency judgments.

Banks agreeing to the foreclosure settlement include: Aurora, Bank of America, Citibank, JPMorgan, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. This new deal is completely separate from last year’s $26 billion National Mortgage Settlement. This settlement initially began in 2011, when the banks were required to hire independent consultants to investigate alleged foreclosure abuses and pay out the victims. With this new settlement, that review process will end for the 10 banks. Instead, there will be a new review process for foreclosure abuse that will allow borrowers to be compensated more quickly and efficiently.

What this means for you

How can you, the homeowner benefit from this foreclosure settlement? About 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010 will receive direct cash payments for foreclosure abuses they went through. If you are eligible for a repayment, you will be contacted by the end of March. Contact your lender if you believe you are entitled to compensation for past foreclosure abuse.

Additionally, any borrower whose mortgage is serviced by one of the 10 banks, who is currently struggling to keep up with their payments, is eligible for aid through the $5.2 billion part of the settlement. This means you may be eligible for a loan modification even if you were rejected in the past. If you have not applied for a loan modification, banks will be more willing and easier to work. Contact Atlantis Law Firm today for assistance with a loan modification.

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