$25 Billion Dollar Settlement

$25 Billion Dollar Agreement Reached in Loan Servicing and Foreclosure Abuses.

This past Thursday, the federal government along with 49 state attorneys general reached a $25 billion dollar agreement with the nation’s five largest mortgage servicers to address what authorities describe as “unsafe and unsound mortgage servicing and foreclosure practices”. These top five servicers are Bank of America, Citibank, JP Morgan Chase, Well Fargo and Ally Financial.

This represents the largest joint federal-state civil settlement in history and follows 16 months of investigation and negotiations. The goal of the settlement is to provide many homeowners who had fallen victim to unethical loan servicing and foreclosure practices, including robo-signing, some financial relief and to establish new homeowner protections.

Under the agreement, banks are to be forced to reduce the principal balance on many loans, to refinance loans for underwater borrowers and pay billions to federal and state government agencies and consumers.

The settlement is a good start. However, economists say that in the larger scheme this monetary agreement is not nearly large enough to alter the housing market’s outlook.

As always, The Law Office of R. Spencer Lauterbach is here to fight for the rights of homeowners facing foreclosure or seeking modifications as well as to keep you informed of the current laws to protect homeowners. For legal assistance, please call the Law Office of R. Spencer Lauterbach at (845) 639-1699. Posted 2.15.2012