Losing your home is a heart-breaking situation with many repercussions for the homeowner. When taken by surprise because a mortgage loan is sold off to another lender without notification of the homeowner, it causes an unfair advantage to the lender. A homeowner who is already in arrears on mortgage payments could become a home foreclosure target just because they do not know where to send their payment.
Most foreclosure situations are more drastic than this scenario, but the unfairness of deceptive home foreclosure practices has caused evictions, home sales, and other damages to homeowners, according to government officials. A measure to halt this trend has finally come to light, as five of the largest mortgage lenders have made an agreement to stop this practice.
Major banks included in this agreement are Citibank, Wells Fargo, Bank of America, JPMorgan Chase and Ally Financial. This settlement applies to private mortgages made between 2008 and 2011, but not government-controlled home loans. Deceptive practices include “robo-signing” of documents, failure to verify information, and signing off foreclosures with fake signatures.
The settlement agreement was made between those lenders and U.S. States, resulting in a sizeable deal that will eventually amount to billions of dollars in benefits to affected homeowners. Up to $25 billion could be returned to Americans in this deal. Approximately three-quarters of a million homeowners will receive checks of $1,800 each under this deal.
Another 750,000 Americans will also be affected by having restructured loans and reduced mortgages. Those who have already lost their residences to home foreclosure actions will benefit less or not at all from this deal. If you are having a foreclosure dilemma, contact your attorney to determine if you might be included in this relief effort.
USA Today: “States review $25B mortgage settlement offer,” Derek Kravitz, Jan. 24, 2012