A federal judge finalized on Thursday a landmark settlement that will bring nearly $1 billion in aid to Maryland homeowners who were victims of deceptive and illegal foreclosure practices.
The settlement, for $25 billion in total, was first reached in February and is the largest ever joint state and federal settlement, according to Maryland Attorney General Douglas F. Gansler.
Gansler had joined the federal government and 48 other state attorneys general in complaining about the banks' practices.
The settlement, approved by U.S. District Court Judge Rosemary M. Collyer, holds the nation's five largest mortgage servicers — Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc., and Ally Financial Inc. — accountable for issuing improper mortgages and premature foreclosures, among other violations.
"With the force of law and the federal courts now behind this settlement we can get down to the business of helping distressed Maryland homeowners," Gansler said in a statement.
Maryland's total settlement share is estimated at $957 million.
According to Gansler's statement, about $808 million will be used to provide for loan term modifications for homeowners in the state; about $24 million for payments to qualified homeowners who lost their homes to foreclosure between 2008 and 2011; $64 million for loan refinancing for homeowners underwater on their homes; and about $60 million for the state to fund programs assisting "distressed" homeowners.
The settlement also creates new mortgage servicing standards and a monitor position to hold the mortgage servicers in compliance. The banks are required to meet 75 percent of their settlement obligations within two years, and 100 percent within three years.
Gansler encouraged homeowners behind on their mortgage payments or who may soon be in "financial trouble" to call his office at 410-576-6300 or toll-free at 1-888-743-0023.
They can also call the Maryland HOPE Hotline at 1-877-462-7555.
For those who made mortgage payments to one of the five involved banks, consumer hotlines can been reached at: 1-800-766-4622 for Ally/GMAC; 1-877-488-7814 for Bank of America and Countrywide; 1-866-272-4749 for Citigroup; 1-866-372-6901 for JPMorgan Chase and WaMu; and 1-800-288-3212 for Wells Fargo and Wachovia.Copyright © 2014, The Baltimore Sun