Some big news today: Five big banks agreed to contribute $25 billion to help relieve the financial burden on homeowners. The money partially immunizes the banks from legal action, and NPR reports, “Most of the money—$20 billion—would go toward writing down principal payments for homeowners who were not foreclosed upon, but who are struggling now.”
So what does that mean for D.C.? According to a release today, the District will get about $40 million, which is dependent on the number of homeowners who take advantage of the relief program. The District government itself will get a $4.6 million check.
Mayor Vince Gray‘s statement is a pleased one: This settlement is a strong win for consumers. Even homeowners who don’t receive direct monetary benefits under the settlement will benefit as the reduction in unnecessary foreclosures helps to stabilize communities and the housing market in and around D.C.”
Full release after the jump:
WASHINGTON, D.C. – Local homeowners are eligible for tens of millions of dollars in mortgage principal reductions and mortgage refinancing savings under a national settlement that state and federal enforcement agencies have reached with the five leading bank mortgage servicers, D.C. Attorney General Irvin B. Nathan said today. At Mayor Vincent C. Gray’s direction, the District joined in the settlement entered into by a contingent of state attorneys general.
The total value of the settlement nationally is about $25 billion. The portion of that amount available to D.C. homeowners is estimated at $40 million, but will depend on how many D.C. homeowners choose to participate in the principal reduction and refinancing programs. D.C. homeowners who lost their homes to foreclosure in 2008-2011 may qualify for cash payments, and the District government will receive a $4.6 million payment.
The settling servicers – which together control about 60 percent of the mortgage servicing market – have agreed to sweeping reforms to their foreclosure-related practices, to supervision by an independent monitor, and to entry of a federal court consent judgment. The settlement resolves only civil enforcement claims relating to the origination, servicing, and foreclosure of mortgage loans. It does not address civil liability relating to the securitization of mortgages or any issues of criminal liability. The settlement will not prevent state and federal enforcers from continuing to investigate and hold accountable those in the mortgage industry whose misconduct helped to cause the housing market collapse in 2008.
“This settlement is a strong win for consumers,” said Mayor Gray. “Even homeowners who don’t receive direct monetary benefits under the settlement will benefit as the reduction in unnecessary foreclosures helps to stabilize communities and the housing market in and around D.C.”
Attorney General Irv Nathan said “We will work to insure that part of the money the District recovers from the settlement goes to educate homeowners of their rights and access to funds under the settlement. Our office will also be vigilant to enforce the settlement in federal court if its provisions are violated or ignored by the banks.”
Borrowers may qualify for benefits under the settlement if their mortgages have been serviced by Bank of America, Citi, GMAC/Ally, JPMorgan Chase, or Wells Fargo. Borrowers seeking information about their eligibility for settlement benefits may contact their servicers at these numbers:
Bank of America 1-877-488-7814
Wells Fargo 1-800-288-3212
General information can be seen at www.NationalMortgageSettlement.com.
Photo by Mr. T in DC via Flickr/Creative Commons Attribution Generic 2.0 License