Mar 15, 2012

Details of the $25B mortgage settlement emerge

As per Niche , the U.S. Department of Justice has filed the respective settlement agreements that the five major mortgage lenders recently signed in relation to their questionable foreclosure processing practices. The agreements amount to a total $26 billion monetary settlement that the banks will have to disburse in the form of cash payments and mortgage principal reductions.

The financial entities involved are: Ally Financial (formerly GMAC), Bank of America, Citigroup, JP Morgan Chase, and Wells Fargo. The agreements are highly detailed and complex, as evidenced by the fact that they are more than 300 pages each. Although the settlement agreements were signed earlier this year, the full details and the mechanisms the banks must adopt to compensate their mortgage borrowers are just beginning to emerge.This settlement is historic in the sense that it is the highest sum obtained from private enterprises by a joint state and federal effort. For the homeowners who were wrongly foreclosed upon and evicted from their properties, the settlement brings some relief.

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