$25 Billion National Mortgage Settlement is Finalized
As you have likely heard by now, 49 of the 50 U.S.states recently reached agreement on a mortgage settlement which will pay $25 billion to borrowers and federal and state governments. The settlement will be paid by the nation’s five largest lenders: Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo. Most of the payout ($20 billion) will be distributed to borrowers to help them avoid foreclosure, while the other $5 billion will be paid to the government.
What’s the point?
The primary goals of the historic $25 billion settlement are to force lenders to provide more assistance to struggling borrowers, as well as compensate those who were allegedly improperly foreclosed upon from 2008 to 2011. The five lenders part of the settlement, which did not admit any wrongdoing, must complete their settlement payouts within three years.
New Standards in Place
According to USA Today, banks are now required to make foreclosure the last possible resort. That includes not being allowed to foreclose on borrowers who are being considered for a loan modification. The new standards are also designed to prevent common foreclosure abuse practices such as lost paperwork or “robo-signing”.
What’s your perspective?
We’d love to know your thoughts on this settlement and how it might impact your business, as well as the industry as a whole. Please share your commentary here!
For more information about this mortgage settlement, visit www.nationalmortgagesettlement.com.