Published On: May 28, 2013
Bank Fraud: Wells Fargo, Bank of America, JP Morgan Chase, Ally Financial and Citigroup to pay $25 billion for fraudulent foreclosure practices
which led to the worst economic crisis since the Great Depression.
In the largest bank fraud case, in February of 2012 the government reached a $25 billion (yes that is billion) settlement the five of the largest banks for bank fraud. Under the terms of the deal, banks would have three years to complete principal write downs, refinancing and other relief. It provides incentives for actions taken within the first 12 months so that the aid can get to homeowners as quickly as possible.
New York Attorney General Eric Schneiderman threatened to sue Wells Fargo and Bank of America for violating the terms of the national settlement agreement.
The settlement also includes about $17 billion that would go toward foreclosure-prevention measures, such as lowering the loan balance for borrowers who owe more than their homes are worth. Other provisions would provide for lowering interest rates for homeowners who are current on their loans. In addition, as many as 750,000 borrowers who lost their homes to foreclosure since 2008 would be eligible for payouts, but hardly enough to put down on the first month’s rent for a new home.
Fast forward to May, 2013 – According to the Washington Post, earlier this month, New York Attorney General Eric Schneiderman threatened to sue Wells Fargo and Bank of America for violating the terms of the national settlement agreement. In a letter to the Washington Post Schneiderman stated that his office has received 339 complaints that the two banks were not complying with the timeline requirements of the agreement. He also has determined that “several other states have identified similar, recurring deficiencies by the participating servicers,” Both Wells Fargo and Bank of America have agreed to “look into the situation”.
Illinois Attorney General Lisa Madigan said that “the new servicing standards were supposed to eliminate headaches for homeowners, but unfortunately, it seems we’re hearing about the same frustrating experiences. Homeowners are. . . experiencing continued delays that put them closer to foreclosure.”
The good news is that some funds are reaching some homeowners. Supposedly Bank of American has entered into agreements in the amount of $27.9 billion out of their $50.6 billion obligation as set forth in the settlement. In addition, Citigroup has provided $3.2 billion in relief to 54,742 homeowners. Ally Financial has given 8,866 borrowers about $657 million in assistance. Wells Fargo said it has helped 90,907 consumers with $5.7 billion in relief, while JPMorgan said it has provided $11.1 billion in help to 126,032 borrowers. These agreements include loan modifications, short sales, refinancing of the debts and forbearance assistance according to a report released by the mortgage oversight settlement monitor.
We have several videos on our web site.
Below are a few that might be of interest:
- “Lender’s Foreclosure Rights in Arizona”
- “Should I keep my home or let it go into foreclosure?”
- “Meet Ms. Drain and Suggestions on How to Hire an Attorney”
[fusion_youtube id=”IzNd62_uQXM” alignment=”center” width=”” height=”” autoplay=”false” api_params=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” css_id=”” /LN5WSvPGxJQ
MUSINGS BY DIANE: “My experience is that my own clients are not receiving but a mere pittance from this settlement. All we can do is wait to see what happens.”
About the Author: Diane Drain
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
“You folks are the BEST OF THE BEST in Arizona.” M.H.
You and Jay are the best attorneys I have ever had or needed and thank God for the Honorable Robert Gottsfield in recommending you folks – I would have never made it through the entire process without you and Jay and God Bless you both always and stay in touch as well. You folks are the BEST OF THE BEST in Arizona.
“My only regret is that I didn’t find Diane sooner.” K.H.
I can’t say enough good things about Diane. The way she handled my not typical circumstances was amazing. I was very nervous to start the bankruptcy process but Diane just has a very comforting way of explaining the whole process. My only regret is that I didn’t find Diane sooner. If you find yourself in a financial situation that you can’t correct on your own, please Call Diane Drain as soon as possible.
“Filing for bankruptcy can be a stressful life event” R.A.
Filing for bankruptcy can be a stressful life event, and selecting the right attorney can add to this stress. Diane and Jay were a pleasure to work with, and it is obvious that they are passionate about helping people get their life back on track. I would highly recommend them if you need a bankruptcy attorney.
Related Posts
Published On: February 23, 2022
WHAT HAPPENS AT THE END OF A COVID-19 FORECLOSURE FORBEARANCE? Can servicers demand a large balance? Generally, the servicers should not be demanding full payment following a COVID forbearance. There [...]
Published On: July 16, 2021
Arizona Residential Eviction Actions Procedures – effective July 15, 2021 IT IS ORDERED that the following procedures are applicable to eviction actions governed by Arizona Revised Statutes, Title 33, filed [...]
Published On: May 17, 2021
Operators of Student Loan Debt Relief Scheme Banned From Providing Debt Relief Services as Part of Settlement with FTC (Reprint from Federal Trade Commission, May 17, 2021) The operators of [...]
Published On: May 16, 2021
There is so much mis-information about a forbearance of home mortgages during COVID-19. Know your options before making a decision not to pay your mortgage. (11/18/21 UPDATE - see summary of foreclosure alternatives) This [...]
My intention is to put you back in control of your life
Start with $0 down*. We provide affordable payment plans.