More than a year ago, with the ripples of the foreclosure crisis still felt heavily by many Americans, attorneys general in all 50 states announced a joint investigation into bank practices among the nation's five largest mortgage servicers. Frustration over delays and impasses has prompted some attorneys general to drop out of settlement negotiations and pursue solo remedies for their own individual states. But, as 2012 kicks off, the mortgage lenders and attorneys general are expected to soon reach a deal that could give some much-needed relief to homeowners struggling with financial problems.
Foreclosure Abuse Deal Could Top $25 Billion
JPMorgan, Citigroup, Bank of America, Wells Fargo and GMAC stand accused of engaging in deceptive and illegal practices in the course of carrying out foreclosures and loan modifications. In settling their suit against the lenders, the state attorneys general seek a broad range of relief for foreclosure abuses, including substantial principle reductions for underwater homeowners, new requirements for conducting home foreclosures and interactions with borrowers, and cash payments to people who lost their homes and can show mistakes in the foreclosure process.
In return for meeting the demands of the attorneys general, the mortgage servicers would be released from legal claims on past servicing and foreclosure practices. Some lenders, however, feel that the deal does not go far enough to protect them from claims regarding mortgage-related practices beyond foreclosure, such as securitization.
Despite mortgage servicer qualms, and the concern among some attorneys general that the proposed deal lets banks off the hook too easily, many sources are predicting that a settlement will get off the ground in early 2012. In December of 2011, Iowa Attorney General Tom Miller, head of the committee negotiating the settlement with the banks, told the Des Moines Register that a deal should be in place by Christmas.
Legal Advice
If you suffered from abusive foreclosure practices or are currently struggling to keep up on a mortgage provided by one of the lenders involved in the settlement, the new deal may directly benefit your financial wellbeing. Contact a bankruptcy attorney today to explore your rights.
