Entries in Robosignings (6)


Banks Reach $8.5B Settlement with Regulators on Foreclosure Abuses

Hemera/Thinkstock(NEW YORK) -- Ten banks have reached an $8.5 billion foreclosure abuse settlement with regulators.  This is not the first or the biggest of such settlements, but another in a series of settlements and lawsuits coming out of the now several-years-old housing bubble.

The deal provides billions in direct payments to 3.8 million homeowners who were forced into foreclosure in 2009 and 2010.  The Fed says they were subjected to “unsafe and unsound” practices by banks.  

In addition to the direct payment, banks will pay $5 billion for loan modifications and other assistance to millions more struggling to stay in their home.

This settlement comes out of the so-called “robo-signing” scandal, where banks were found to be fast tracking foreclosures without adequate paperwork.

Borrowers eligible for payment do not need to take any action; they will be contacted by a “payment agent” set up as part of this settlement.  If a borrower thinks they should be eligible, they should contact their bank.

This agreement includes Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo.  Regulators are still negotiating with some servicers, so the size of the settlement could grow.

State Attorneys generals came to a somewhat similar $25 billion settlement with banks last year.  

Monday's announcement is separate from Bank of America’s more than $10 billion settlement with Fannie Mae announced earlier in the day.

Copyright 2013 ABC News Radio


What the $25B Foreclosure Settlement Means For You

iStockPhoto/Thinkstock(WASHINGTON) -- While the $25 billion foreclosure settlement announced on Thursday is a landmark multi-state deal, it is just a "drop in the bucket" that will help residents of some states more than others, housing advocates say.

The five biggest mortgage servicers, JPMorgan Chase, Citi, Ally Financial, Wells Fargo and Bank of America, have settled, but more lenders could potentially join later.  Under the deal, signed by 49 state attorney generals, 750,000 people could receive checks under the plan and another one million could see the size of their mortgages reduced.

President Obama said the deal could strengthen the overall economy but "by itself will not entirely heal the housing market."

"But this settlement is a start," the president continued.

Gordon Whitman, policy director for PICO National Network of faith-based community organizations, said the deal is "'too small."  The $10 billion in principal reduction compared to $700 billion in negative equity in the U.S. with an outstanding mortgage debt of $8.8 trillion is a "small drop in the bucket of what really needs to be done."

"It needs and will lead to much more significant principle reduction for American homeowners," he said.  "There are a lot of people talking about closure. From our perspective, it's much more logical to think of this as a first step."

The size of the deals per state thus far reflect the commitment of each attorney general, Whitman said.  Homeowners can check the website for more information by state, except for residents in Oklahoma.

"We think the continued advocacy by the attorney generals is the critical factor to make sure this is just a down payment on a full and fair settlement," Whitman said.

Scott Brown, chief economist with Raymond James, said the one million homeowners who may restructure their mortgages comprise only 10 percent of those underwater. Brown said the deal will not have a large impact on the U.S. economy or consumers.

"Every little bit helps and it will be significant for those restructuring, but it's not going to have a huge impact on the housing sector overall," he said. 

Payments of about $2,000 will be made to about three-quarters of a million households that were foreclosed on through abusive practices, distributed over three years.

"That will be good for those receiving checks, but the impact on overall consumer spending is likely to be relatively small," he said.

Copyright 2012 ABC News Radio


Feds Announce $25B Foreclosure Abuse Deal

Office of the Maine Attorney General(WASHINGTON) -- Government officials announced on Thursday a record $25 billion settlement with the five biggest banks related to foreclosure abuses, including "robo-signing" of documents.

Among the money allocated will be $1.5 billion distributed nationwide to about 750,000 borrowers who lost their homes to foreclosure. The deal is the largest multi-state settlement since the Tobacco Settlement in 1998, the Department of Justice said.

Five banks -- Wells Fargo, Bank of America, Citigroup, JPMorgan Chase and Ally Financial -- will also have to "work off up to $17 billion in principal reduction and other forms of loan modification relief nationwide," and "provide up to $3 billion in refinancing relief nationwide," according to the settlement.

Attorney General Eric Holder said the deal by 49 state attorneys general, who worked late into the hours of Wednesday night, does not preclude states from pursuing their own suits against the banks.

Holder announced further terms of the deal would be on a website,, and residents of the states involved should visit the sites of their respective attorneys general.

Department of Housing and Urban Development Secretary Shaun Donovan said the settlement holds banks accountable for abuses against homeowners, which "continued long after people got the keys to their new home."

"No more lost paperwork, no more excuses, no more rhetoric," Donovan continued.

Donovan said the investigation comprised at least 15,000 hours of reviewing thousands of files of Federal Housing Administration insured loans.

Copyright 2012 ABC News Radio


Multi-Million Dollar Settlement over Foreclosure Abuses Near

iStockPhoto/Thinkstock(NEW YORK) -- Federal and state officials are near a multi-billion dollar settlement with five of the nation's biggest banks over foreclosure abuses that took place during the housing crisis, ABC News has learned.

The Department of Justice will hold a press conference at 10 a.m. Thursday to announce an agreement in principal.

At least 42 states have agreed to sign onto the agreement.  New York and California were among the last holdouts and it wasn't clear whether they will join or sue separately.

The deal is estimated to be $25 billion and would involve Wells Fargo, Bank of America, Citigroup, JPMorgan Chase and Ally Financial.

Some of the money would go towards foreclosure prevention measures, such as lowering the loan balance for homeowners who are underwater, while other provisions could lower interest rates.

Another chunk would be set aside to compensate people who lost their homes.  Those homeowners may may get payouts of up to $2,000.

The settlement comes after banks were found to have taken part in "robo-signing" to speed up foreclosures after the housing bubble burst.  The practice involved the mass signing documents without verifying the accuracy of the paperwork.

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Copyright 2012 ABC News Radio


States Agree on $25B Foreclosure 'Robo-Signing' Deal

iStockPhoto/Thinkstock(NEW YORK) -- Officials from more than 40 states have signed a record $25 billion settlement with the five biggest banks related to foreclosure abuses, including "robo-signing" of documents. The practice involves the mass signing of forclosure documents without verifying the acccuracy of the paperwork.

For the past year, President Obama has advocated for a mortgage relief plan with the five biggest mortgage servicers -- Bank of America, JPMorgan Chase, Wells Fargo and Ally Financial --  to settle an investigation of foreclosure abuses.  Evidence of robo-signing foreclosure documents began to show in 2010 during a record national wave of foreclosed homes.

"This enables us to move forward into the very final stages of remaining work.  Federal and state officials, as well as representatives from the banks, continue to address matters that they must complete before finalizing any settlement," Iowa Attorney General Tom Miller said in a statement late Monday.

Several states had previously agreed to a $19 billion settlement that would be used for national mortgage relief. The deal was reported to designate $17 billion to pay for principal reductions and other relief for up to one million borrowers who are behind in payments but owe more than their houses are currently worth, The New York Times reported. The deal would also provide checks of about $2,000 to roughly $750,000 to people who lost homes to forclosure.

However, those settlements would change depending on the number of homeowners between Jan. 1, 2008, and Dec. 31, 2011 who accepted the offer.  Homeowners who participate in the settlement would still have the right to sue the banks, according to Patrick Madigan, the Iowa assistant attorney general, The New York Times reported.

California and New York had expressed interest in joining the deal but were the last major holdouts. 

New York State's attorney general Eric Schneiderman and California's attorney general Kamala Harris had previously said the settlement terms were not adequate. Schneiderman reportedly hopes to investigate the root causes of the financial collapse, and Harris wants stronger measures to benefit individual homeowners.

Copyright 2012 ABC News Radio


Watchdog Panel to Grill Treasury on Foreclosure Robo-Signings

Photo Courtesy - ABC News(WASHINGTON) -- A treasury official will be on the hot seat Wednesday as a congressional watchdog group, known largely for its scathing assessments of the federal bank bailout, will hold the first public hearing to tackle the foreclosure robo-signings scandal.

The hearing, by the Congressional Oversight Panel for the Troubled Asset Relief Program, was originally to focus on the government's foreclosure mitigation programs, including the Home Affordable Modification Program. Now, COP spokesman Thomas Seay said, the panel will also hear testimony on how "robo-signed" affidavits -- foreclosure paperwork that allegedly was signed by employees who failed to properly review it -- could hurt the housing market and banks' bottom lines.

The panel will question Phyllis Caldwell, the Treasury Department's chief of the Homeownership Preservation Office, to learn how the administration is addressing the issue.

The robo-signing allegations are under investigation by state attorneys general, banking regulators and the administration's Financial Fraud Enforcement Task Force. The Department of Housing and Urban Development is also reviewing the issue as part of a broader investigation into whether mortgage servicers were complying with government mandates to offer loan modifications for mortgages backed by the Federal Housing Administration.

Copyright 2010 ABC News Radio

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