Mortgage settlement relief is one step closer for homeowners

It's anticipated that of the $25 billion in the settlement, approximately $648 million will be available to Washington state homeowners.

Washington State Attorney General and Republican gubernatorial candidate Rob McKenna, along with 48 other state attorneys general, joined forces with the U.S. Department of Justice (DOJ) and the Department of Housing and Urban Development (HUD) in filing a civil complaint alleging misconduct by the nation’s five largest mortgage service providers.

The complaint, filed in the U.S. District Court for the District of Columbia, is “a major step toward finalizing the biggest consumer protection settlement in U.S. history,” according to McKenna’s office. The banks are being accused of the “issuance of improper mortgages, premature and unauthorized foreclosures, violation of service members’ and other homeowners’ rights and protections, (and) the use of false and deceptive affidavits and other documents, and the waste and abuse of taxpayer funds.”

This legal action follows the February announcement of a $25 billion settlement between the federal government and the big five banks.

Along with the complaint, “consent judgments” — proposed federal court orders — were filed, which formalize the settlements.

“These powerful, court-enforceable orders will assure the direct relief we negotiated in this settlement,” McKenna said. “This is an important step toward the loan modifications, principal reductions, and other benefits many borrowers will receive.”

It’s anticipated that of the $25 billion in the settlement, approximately $648 million will be available to Washington state homeowners.

Scott Jarvis, director of the state’s Department of Financial Institutions, says the filing of the complaint will help guard against predatory lending practices in the future.

“Consumers need protection to ensure that mortgage servicing companies treat borrowers fairly. This settlement goes a long way toward that goal,” Jarvis said. “I commend the states’ attorneys general for their dogged pursuit of fair treatment for homeowners.”

The five banks being targeted for their unscrupulous practices following the bursting of the housing bubble are Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial (formerly GMAC).

Learn more

For more information on the settlement, visit www.atg.wa.gov, www.nationalforeclosuresettlement.com or www.hud.gov.

Consumer numbers for the aforementioned banks are:

• (877) 488-7814 for Bank of America

• (866) 272-4749 for Citigroup

• (866) 372-6901 for Chase

• (800) 766-4622 for Ally/GMAC

• (800) 288-3212 for Wells Fargo

 

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