How the $25 Billion Settlement with Bank of America Affects Homeowners
Earlier this month, the Huffington Post reported that supporters of the Occupy Wall Street movement had mobilized in protest outside Bank of America’s shareholder meeting, which took place in Charlotte, North Carolina. Bank of America’s role in the foreclosure crisis was a major factor in the decision to protest the meeting.
Not only has bank conduct in the last few years sparked protest, but lawsuits have also been initiated.
As summarized in a recent Forbes article, the federal government, forty-nine states, and Washington, D.C. recently reached a settlement with five of the biggest mortgage lenders for corrupt practices— such as failing to use good faith in homeowner negotiations. Oklahoma reached its own settlement for $18.6 million. For the rest of the states, a settlement was reached in February of this year for $25 billion. The banks involved were Bank of America, Ally Bank, CitiCorp, JPMorgan Chase, and Wells Fargo.
The Moorestown real estate attorneys at our firm appreciate that many New Jersey residents struggling with their mortgage might be wondering how the settlement affects them.
Outcomes from the Settlement
The class action settlement has many positive effects for homeowners in financial distress. In the aftermath of the settlement, lenders are encouraged to offer lower rates to existing borrowers and even lower the principal amount to avoid foreclosure. However, with the new rules stemming from the settlement, lenders are also now able to move forward with foreclosure proceedings for some debtors who have defaulted.
The federal government felt its success with the settlement arose from the fact that lenders now have to reform some of the deceptive practices in which they were previously engaged. Another victory for homeowners comes from the settlement’s provisions that aim to prevent “robo signing.” Robo signing is the process by which documents that have barely been reviewed are presented to courts in support of foreclosure filings against homeowners. After the settlement, it is mandatory for lawyers and other representatives from the banks to affirm the veracity of the filings. Also, banks must take several additional steps before moving to foreclose on a property. Our Burlington County real estate attorneys know that the goal of many of the new rules arising from the settlement is to decrease the current speed at which lenders are filing for foreclosures.
See if You Qualify for Help
As New Jersey struggles to deal with the foreclosure crisis, many of the rules stemming from the government’s settlement with these lenders will likely work in your favor and might even offer alternatives you did know existed. Our New Jersey real estate attorneys are very familiar with recent developments in the mortgage-crisis and are available to work with you to determine if you can benefit from this settlement.