Historic Settlement Affects Veterans, VA Borrowers
The Department of Housing and Urban Development recently announced a historic $25 billion settlement between the federal government and five major lenders over loan servicing and foreclosure abuses.
According to a HUD press release, this arrangement offers “substantial financial relief to homeowners and establishes significant new homeowner protections for the future”.
The settlement, which involves Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup Inc., and Ally Financial Inc. (formerly known as GMAC) is the result of investigations by the Department of Justice, HUD and the HUD Office of the Inspector General, plus state attorneys general and state banking regulators.
“This agreement–the largest joint federal-state settlement ever obtained–is the result of unprecedented coordination among enforcement agencies throughout the government,” said U.S. Attorney General Eric Holder.
“It holds mortgage servicers accountable for abusive practices and requires them to commit more than $20 billion towards financial relief for consumers. As a result, struggling homeowners throughout the country 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.”
Department of Housing and Urban Development Shaun Donovan said, “”This historic settlement will provide immediate relief to homeowners, forcing banks to reduce the principal balance on many loans, refinance loans for underwater borrowers, and pay billions of dollars to states and consumers…”
This settlement has implications for veterans, who are specifically named in the settlement.
According to the HUD press release, “The agreement will also provide enhanced protections for service members that go beyond those required by the Servicemembers Civil Relief Act (SCRA). In addition, the four servicers that had not previously resolved certain portions of potential SCRA liability have agreed to conduct a full review, overseen by the Justice Department’s Civil Rights Division, to determine whether any servicemembers were foreclosed on in violation of SCRA since Jan. 1, 2006.”
We’ll talk more about this portion of the settlement in another blog post. For more information about the mortgage servicing settlement, visit www.NationalMortgageSettlement.com. To find your state attorney general’s website, go to www.NAAG.org and click “The Attorneys General.”