$10 Billion Bank Foreclosure Abuse Settlement Deal Neared
Federal regulators are reportedly close to reaching a $10 billion settlement with more than a dozen banks accused of rampant foreclosure abuses, which often led to faulty evictions.
Miami foreclosure defense attorneys understand that while an estimated $3.75 billion of this would reportedly go directly to people who wrongly lost their homes (a better deal than the earlier $26 billion settlement with four major banks that only set aside $1.5 billion for the same purpose), it would also effectively end the federal government’s efforts to hold lenders responsible for their actions during the housing market implosion. Additionally, it would bring the tedious, expensive and questionable “independent” foreclosure reviews conducted by numerous large banks to a screeching halt.
While all of this is meant to spell relief to homeowners who have been wronged, $10 billion isn’t even close to being enough to rectify the situation, particularly when it’s split 14 ways (the number of banks involved). While Wall Street gets to wipe its hands clean of disaster it created for pennies on the dollar, those on Main Street are stuck trying to put the pieces back together. If you’re currently facing foreclosure in Miami – Ground Zero of the housing crisis – that’s a lot of heavy lifting. It’s certainly not a job you want to take on without the experience of a tough-as-nails foreclosure attorney with a proven record of success and a willingness to fight.
We’re talking about an industry who put us in the position of being in the worst economic slump since the Great Depression. Millions of homeowners are still reeling. As of early last year, some 4 million U.S. homeowners had been forced from their homes in foreclosure actions. Those who were able to hold on to their properties have had to contend with plummeting home prices, compounded particularly in Florida by a glut of abandoned, unkempt houses and lots nearby.
It speaks volumes that while talks regarding this deal had been ongoing for more than a month between the banks and the Office of the Comptroller of the Currency, housing advocates for the most part didn’t know about it. Their response? The government clearly isn’t being harsh enough with these firms, particularly with regard to the banks’ systematic packaging of risky loans as investments and their subsequent sloppy foreclosure procedures. The latter involved not only faulty paperwork, but also outrageous fees and a resistance to reaching loan modification agreements.
The same banks involved in the earlier, $26 billion settlement, would also be involved in this deal: Wells Gargo, Citigroup, JP Morgan Chase, Ally Financial and Bank of America.
The terms, as they have been revealed so far, are that while $3.75 billion would go to former, evicted homeowners, another $6 billion would be set aside to aid current struggling homeowners. This would occur in the form of principal reductions, reasonable refinancing offers and donation of abandoned homes to those in need.
If the deal passes, as it is expected to do within the next several days, the independent foreclosure reviews the comptroller had required of those 14 banks would effectively cease. (These contract consultants, paid by the banks, are charging some $250 hourly to review each loan. Review times, and therefore costs, are reportedly triple what they were initially estimated to be, causing banks to dole out more than $1.5 billion so far to consultants.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.