February 16, 2012
The Department of Housing and Urban Development recently announced a $25 billion settlement between the government and the five largest banks in the U.S.
United States Attorney General Eric Holder, Department of Housing and Urban Development (HUD) Secretary Shaun Donovan, Iowa Attorney General Tom Miller and Colorado Attorney General John W. Suthers announced the “landmark $25 billion agreement with the nation’s five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses.”
According to the press release, this is the largest federal-state civil settlement ever obtained and is the result of “extensive investigations by federal agencies, including the Department of Justice, HUD and the HUD Office of the Inspector General (HUD-OIG), and state attorneys general and state banking regulators across the country.”
The settlement includes Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup Inc., and Ally Financial Inc. previously known as GMAC.
According to U.S. Attorney General Eric Holder, “This agreement–the largest joint federal-state settlement ever obtained–is the result of unprecedented coordination among enforcement agencies throughout the government…It holds mortgage servicers accountable for abusive practices and requires them to commit more than $20 billion towards financial relief for consumers.”
Holder says many homeowners affected by the agreement will, “benefit from reduced principals and refinancing of their loans. The agreement also requires substantial changes in how servicers do business, which will ensure the abuses of the past are not repeated.”
HUD Secretary Shaun Donovan had plenty to say about the settlement. “Banks must follow the laws. Any bank that hasn’t done so should be held accountable and should take prompt action to correct its mistakes. And it will not end with this settlement. One of the most important ways this settlement helps homeowners is that it forces the banks to clean up their acts and fix the problems uncovered during our investigations. And it does that by committing them to major reforms in how they service mortgage loans.”
Learn more about the settlement at www.NationalMortgageSettlement.com. If you want to know whether the settlement affects you, contact the FHA directly at (800) CALL-FHA or (800) 225-5342.
FHA borrowers who believe they were improperly or illegally foreclosed upon by one of the financial institutions named in this settlement should get in touch with the FHA as soon as possible to learn of options and possible recourse, where appropriate.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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